When a friend of mine asked me about stocks the other day, I mentioned that I've been buying shares of Nano-X Imaging (NASDAQ:NNOX). And then he asked me what they did. And I told him.

"X-rays?" he said. "But we've all got X-rays already." And that's true. Most people in the U.S. have access to X-rays. If you have health insurance, there aren't many barriers between you and the imaging technology. But these machines are physically massive and seriously expensive.

What's fascinating about Nano-X is that the company plans to offer a similar X-ray device that is smaller and cheaper to manufacture by a couple of orders of magnitude. Instead of costing over $1 million to produce and sell, Nano-X claims that it can manufacture its new X-ray device and then sell them to hospitals for only $10,000.

Image of a cot and a thin, circular X-ray device that surrounds part of the cot.

Image source: Nano-X Imaging.

What makes Nano-X's machine so special?

Nano-X is an Israeli company commercializing an idea that was first developed in Japan. A group of Sony (NYSE:SONY) engineers were working on field-emission technology for flat-panel displays when Sony put a stop to the project. The engineers thought the technology from the project might work well for a totally different use case -- X-rays.

Uniting with a venture capitalist in Japan named Hitoshi Masuya, they formed a start-up to work on a new kind of X-ray scanner. Eight years later, the company has a working prototype of their medical device, and a new CEO based in Israel, Ran Poliakine. Masuya sits on the board of directors and is still heading up the original team of engineers in Japan. The company has submitted its device to the U.S. Food and Drug Administration (FDA) and expects to earn its 510(k) clearance in the first half of 2021. Right now, Nano-X has no revenues, and it's hotly debated whether its machine will actually work.

What's most exciting about Nano-X's potential product is the field-emission technology that is powering this X-ray instead of the traditional thermionic effect method. The typical technology requires a massive machine, because it has to manufacture a lot of heat (up to 2,000 degrees celsius), and then cool itself down. The Nano-X device doesn't need any of that. Using nanotechnology, Nano-X has developed a silicon chip that distributes this task of creating electrons across 100 million digitally controlled nanocones. That's what makes this X-ray a lot smaller, and a lot cheaper to manufacture and maintain.

X-rays for all and at a lower cost

Nano-X plants to sell its machines at cost or even below cost, and the company will take a percentage of patient costs every time the X-ray is used. In countries where such deals are not allowed, the company will sell the machine for a profit. The scheme would still be significantly cheaper for hospitals than existing technology.

For investors, the cheap up-front cost and the subscription platform are very exciting. Roughly two-thirds of the world population still do not have access to X-rays, according to the World Health Organization (WHO). About 75% of diagnostic problems can be solved through basic use of X-rays and ultrasound exams. Nano-X projects that its $300 X-ray could be reduced to as much as $40 for patients. In many places around the world, Nano-X's machine could be like the arrival of mobile phones.

The X-ray, the groundbreaking 19th century technology that allows us to see inside the human body, is about to go digital. And it could be far more ubiquitous than it is at present because of Nano-X. Would it surprise you that Foxconn, the manufacturer of the iPhone, is collaborating with Nano-X as a minority shareholder? Or that SK Telecom (NYSE:SKM) has invested $23 million in the company?  

The stock has been a thrill ride

Nano-X went public in August, and the stock opened at a little over $20 a share. In under two weeks, the stock doubled. By the middle of September, it had tripled to $66 a share.

That's when shorts began to attack the stock, claiming that Nano-X was pulling off an elaborate fraud. The share price dropped from $66 all the way back down to $22 in about a week. The stock bounced back after Nano-X announced a live demonstration of its device will take place in November, at the Radiology Society of North America (RSNA) conference.    

NNOX Chart

NNOX data by YCharts

This sort of volatility is common when you invest in rule-breakers that are disrupting the status quo. We saw it with Amazon back in the day, and Tesla more recently. Investors can expect more spikes and dips in the future. And this is why people are talking about Nano-X right now. The company has no profits and no revenue, but a huge potential upside. Investors should keep up with Nano-X's demon shorts and class action cronies, and make sure that the company can produce a machine that actually works before placing their trust and dollars in the stock. If you think X-rays are boring, you might be in for a surprise.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.