MedWhat insists Stanford University failed to disclose a conflict of interest when it invested in rival virtual medical assistant developer Sensely.

MedWhat, a US-based virtual medical assistant developer suing shareholders including Stanford University and its StartX fund, has accused a group of investors of unfairly exploiting a note issue to glean strategic information, Analytics Insight has reported. MedWhat will argue its case exposes unfair practices deployed by its investors, in addition to a lack of transparency, honesty and good faith. The company alleges investors used the note to access commercial information while ensuring minimal risk so long as they claimed back the principal after the note’s two-year lifespan. The exploited data is said to have covered MedWhat’s technology, business strategy, customers, market strategy and product roadmaps. It was used by investors to gain a better understanding of medical artificial intelligence technologies, court documents argue. MedWhat’s point forms part of a countersuit filed against cross complainants including Stanford-StartX Fund, Caixa Capital, Regent Capital Ventures and Startcaps Ventures, all of which sued MedWhat in April 2018. Stanford has not publicised the details of its accusations. The note in question contained a clause enforcing equity conversion once MedWhat had raised more than $1.5m in preferred shares equity, a milestone allegedly reached in 2017, the company will say. Magic Stone Alternative Investments, Regent Capital, Caixa Capital, StartCaps and IncWell are all supposed to have boycotted conversion in contravention of the terms while spreading damaging rumours to encourage other investors to follow suit. Citing records from deals database Crunchbase, MedWhat also insists both Stanford and Magic Stone had clear conflicts of interest due to their investments in rival medical assistant developer Sensely. MedWhat is developing an AI-powered medical chatbot that advises the user on remedies for potential health problems. It raised $560,000 in a 2014 seed round featuring Stanford-StartX Fund, Stanford Hospital, Startcaps Ventures and assorted angel investors. Stanford-StartX Fund subsequently provided MedWhat with follow-on sums of undisclosed size in 2015 and 2017. MedWhat’s regulatory filings show it obtained at least $2.6m in capital last year.

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