Full Press Release Details
CONSOLIDATED UNAUDITED BALANCE SHEETS
(U.S. dollars in thousands, except share and per share
| June 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Unaudited | Audited | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 17,824 | $ | 8,844 | ||||
| Short-term bank deposit | - | 15,912 | ||||||
| Prepaid expenses and other current assets | 130 | 100 | ||||||
| Total current assets | $ | 17,954 | 24,856 | |||||
| Non-current assets | ||||||||
| Property and equipment, net | 136 | 161 | ||||||
| Total non-current assets | 136 | 161 | ||||||
| Total assets | $ | 18,090 | $ | 25,017 | ||||
| Liabilities and shareholders' equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accruals | ||||||||
| Trade | $ | 32 | $ | 141 | ||||
| Other | 806 | 783 | ||||||
| Employees and payroll accruals | 75 | 406 | ||||||
| Total current liabilities | 913 | 1,330 | ||||||
| Shareholders' equity | ||||||||
| Share capital, Ordinary shares, 48 NIS par value ( 18,000,000 authorized shares as of June 30, 2024 and December 31,2023 respectively and 5,851,042 and 5,850,555 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively) | 83,753 | 83,746 | ||||||
| Additional paid-in capital | 84,597 | 84,802 | ||||||
| Accumulated deficit | ( 151,173 | ) | ( 144,861 | ) | ||||
| Total shareholders' equity | 17,177 | 23,687 | ||||||
| Total liabilities and shareholders' equity | $ | 18,090 | $ | 25,017 |
CONSOLIDATED UNAUDITED STATEMENTS
(U.S. dollars in thousands, except
share and per share data)
| Six months ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Research and development expenses, net | $ | ( 335 | ) | $ | ( 8,151 | ) | ||
| General and administrative expenses | ( 6,484 | ) | ( 2,762 | ) | ||||
| Impairment of fixed assets | - | ( 1,364 | ) | |||||
| Operating loss | ( 6,819 | ) | ( 12,277 | ) | ||||
| Finance Income , net | 507 | 957 | ||||||
| Loss before income tax | ( 6,312 | ) | ( 11,320 | ) | ||||
| Net loss for the period | $ | ( 6,312 | ) | $ | ( 11,320 | ) | ||
| Loss per share: | ||||||||
| Net loss per ordinary share basic and diluted | $ | ( 1.08 | ) | $ | 1.94 | |||
| Weighted average number of ordinary shares outstanding - basic and diluted | 5,850,799 | 5,847,392 |
CONSOLIDATED UNAUDITED STATEMENTS
OF CHANGES IN SHAREHOLDERS' EQUITY
(U.S. dollars in thousands, except
share and per share data)
| Number of Ordinary Shares (1) | Amount | Additional paid-in capital | Accumulated deficit | Total shareholders' equity | ||||||||||||||||
| Balance as of January 1, 2024 | 5,850,555 | $ | 83,746 | $ | 84,802 | $ | ( 144,861 | ) | $ | 23,687 | ||||||||||
| Share-based compensation | - | - | ( 198 | ) | - | ( 198 | ) | |||||||||||||
| RSUs vesting | 487 | 7 | ( 7 | ) | - | - | ||||||||||||||
| Net loss | - | - | - | ( 6,312 | ) | ( 6,312 | ) | |||||||||||||
| Balance as of June 30, 2024 | 5,851,042 | $ | 83,753 | $ | 84,597 | $ | ( 151,173 | ) | $ | 17,177 | ||||||||||
| Balance as of January 1, 2023 | 5,844,463 | $ | 83,664 | $ | 84,941 | $ | ( 127,293 | ) | $ | 41,312 | ||||||||||
| Share-based compensation | - | - | 198 | - | 198 | |||||||||||||||
| RSUs vesting | 4,753 | 64 | ( 64 | ) | - | - | ||||||||||||||
| Net loss | - | - | - | ( 11,320 | ) | ( 11,320 | ) | |||||||||||||
| Balance as of June 30, 2023 | 5,849,216 | $ | 83,728 | $ | 85,075 | $ | ( 138,613 | ) | $ | 30,190 |
CONSOLIDATED UNAUDITED STATEMENTS
(U.S. dollars in thousands, except
share and per share data)
| Six months ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( 6,312 | ) | $ | ( 11,320 | ) | ||
| Adjustments required to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | 25 | 190 | ||||||
| Impairment of fixed assets | - | 1,364 | ||||||
| Share-based compensation | ( 198 | ) | 198 | |||||
| Financial income, net | - | ( 323 | ) | |||||
| Changes in assets and liabilities items: | ||||||||
| Increase in prepaid and other current assets and non-current assets | ( 30 | ) | ( 255 | ) | ||||
| Increase (decrease) in trade accounts payable, accruals and other current liabilities | ( 86 | ) | ( 270 | ) | ||||
| Increase (decrease) in employees and payroll accruals | ( 331 | ) | 686 | |||||
| Decrease in royalties provision | - | ( 94 | ) | |||||
| Net cash used in operating activities | $ | ( 6,932 | ) | $ | ( 9,824 | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of property and equipment | - | ( 83 | ) | |||||
| Changes in short-term deposits | 15,912 | 8,069 | ||||||
| Net cash provided by (used in) investing activities | $ | 15,912 | $ | 7,986 | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Issuance of ordinary shares in the registered direct offerings, net of issuance expenses | - | - | ||||||
| Net cash provided by financing activities | $ | - | $ | - | ||||
| Net increase(decrease) in cash, cash equivalents and restricted cash | 8,980 | ( 1,838 | ) | |||||
| Cash, cash equivalents and restricted cash at the beginning of the period | 8,844 | 4,442 | ||||||
| Cash, cash equivalents and restricted cash at the end of the period | $ | 17,824 | $ | 2,604 |
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
(U.S. dollars in thousands, except share and
NOTE 1 - GENERAL INFORMATION
Check Cap Ltd. (the "Company") was incorporated
under the laws of the State of Israel. The registered address of its offices is 29 Abba Hushi Avenue, Isfiya 3009000, Israel.
The Company has two wholly-owned subsidiaries, Check-Cap
US, Inc., that was incorporated under the laws of the State of Delaware on May 15, 2015 and Check-Cap Canada that was incorporated under
the laws of Ontario, Canada on April 9, 2024.
The Company was engaged in a clinical-stage medical
diagnostics that aimed to redefine colorectal cancer (CRC) screening through the introduction of C-Scan , a screening test designed
to detect polyps before they may transform into colorectal cancer to enable early intervention and cancer prevention. The Company's
disruptive capsule-based screening technology aims to significantly increase screening adherence worldwide and help people to stay healthy
through preventive CRC screening. C-Scan uses an ultra-low dose X-ray capsule, an integrated positioning, control and recording system,
as well as proprietary software to generate a 3D map of the inner lining of the colon. C-Scan is non-invasive and requires no preparation
or sedation, allowing the patients to continue their daily routine with no interruption as the capsule is propelled through the gastrointestinal
tract by natural motility.
On March 21, 2023, the Company announced that following
the Company's internal assessment of the clinical data collected until such date from its calibration studies, the Company has determined
that the most recent efficacy results from the Company's calibration studies did not meet the goal in order to proceed to the powered
portion of the U.S. pivotal study.
The Company further announced
that it had adopted a plan of actions that included conducting additional clinical data analysis and approaching the U.S. Food and Drug
Administration ("FDA") to make amendments to the U.S. pivotal study and that the Company is also implementing a cost reduction
plan in order to extend its cash runway, and that the initiation of the powered portion of the U.S. pivotal study that was expected in
mid-2023 is therefore temporarily postponed.
On June 6, 2023, the Company announced
that after further review of additional data and interaction with the FDA on a revised pivotal study protocol together with the anticipated
time and investment necessary to further develop the technology, the Company's Board of Directors has determined that it is appropriate
to pursue strategic options.
In addition, the Company's
Board of Directors approved a significant reduction in its workforce, to reduce the Company's cash burn, after which the Company
expects to have two remaining employees. In light of these developments, the Company discontinued the calibration studies and does not
plan on commencing the powered portion of its U.S. pivotal study and plans to concentrate its resources on its essential research activities
and strategic alternatives.
Since its inception, the Company has devoted substantially
all of its efforts to research and development, clinical trials, recruiting management and technical staff, acquiring assets and raising
capital. The Company has not yet generated revenues. As of June 30, 2024, the Company's accumulated deficit was approximately $151,429.
The extent of the Company's future operating losses and the timing of becoming profitable are uncertain.
Entry into a business combination agreement
On August 16, 2023 the Company
announced the it entered into a business combination agreement (the "BCA") with Keystone Dental Holdings, Inc., a Delaware
corporation ("Keystone"), Capstone Dental PubCo, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Keystone
("PubCo"), Capstone Merger Sub Ltd., an Israeli company and a direct, wholly owned subsidiary of PubCo ("Israeli Merger
Sub"), and Capstone Merger Sub Corp., a Delaware corporation and a direct, wholly owned subsidiary of PubCo ("U.S. Merger
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
(U.S. dollars in thousands, except share and
NOTE 1 - GENERAL INFORMATION (cont')
Entry into a business combination
agreement with Keystone (cont')
The BCA included provisions granting
both Check-Cap and Keystone the right to terminate the BCA for certain reasons, including, among others, (i) the Business Combination
not having been consummated by January 31, 2024 (subject to certain exceptions and to potential automatic extension, the "Termination
Date"), (ii) any governmental authority having issued an order, decree or ruling, or taken any other action (including the enactment
of any statute, rule, regulation, decree or executive order) enjoining or prohibiting the Business Combination, or (iii) under certain
conditions, there having been a material breach of any of the representations, warranties, covenants or agreements set forth in the BCA
by a party to the BCA. The BCA further provides that if the BCA is terminated under certain circumstances, Check-Cap may be required to
pay to Keystone a nonrefundable fee in the amount of $1,500 and reimburse Keystone for up to $1,500 of its expenses, and Keystone may
be required to pay to Check-Cap a nonrefundable fee in the amount of $4,000, and reimburse Check-Cap for up to $1,000 of its expenses.
The closing of the BCA was subject to satisfaction or waiver of certain conditions as stated in the BCA including the required approvals
by the parties' shareholders. On December 18, 2023, at the Annual General Meeting of Shareholders (the "Meeting"), the
BCA and the business combination transactions contemplated pursuant to the BCA, did not receive the requisite majority required for approval
by the Company's shareholders, under Section 320 of the Israeli Companies Law 5759-1999.
December 24, 2023, the Company received a notice (the "Notice") on behalf of Keystone Dental Holdings, Inc., terminating
the BCA. In the Notice, the Company was notified that the BCA has been terminated pursuant to Section 10.1(e) of the BCA in light of
the results of the Meeting of the Company, held on December 18, 2023.
addition, at the Meeting, the then existing Company's Board of Directors did not receive the requisite majority required for
approval by the Company's shareholders to be reappointed as board members and five new board members received such required
majority and as a result the Board of Directors was replaced by new board members. As a result of the business combination
transaction process the Company incurred transaction related expenses, recorded in the General and Administrative expenses line item
in the consolidated statement of operations for the year ended December 31, 2023.
On October 7, 2023, thousands
of Hamas terrorists invaded Israel's southern border towns near the Gaza Strip and carried out attacks on civilian and military
targets that were extraordinary in scale and brutality. Hamas and other terrorist groups also launched extensive rocket attacks from the
Gaza Strip against civilian targets in various parts of Israel. As a result, Israel declared war against Hamas, called up hundreds of
thousands of reserve soldiers and launched an extensive military campaign against them. In parallel, border clashes between Israel and
the Hezbollah terrorist group on Israel's northern border with Lebanon have intensified and may escalate into a greater regional
conflict. To date, the Company operations have not been adversely affected by the war. The Company has back- up IT systems and remote
work ability that the Company expects will enable its operations to function well in the event of an emergency.
Entry into a business combination agreement
March 25, 2024, the company entered into a business combination agreement (the "Nobul BCA") with Nobul AI Corp.
("Nobul"), a private Ontario corporation (the "Nobul Business Combination"). If the Nobul Business
Combination is consummated, Check-Cap's ordinary shares will be delisted from Nasdaq and deregistered under the Securities
Exchange Act of 1934 and Check-Cap will no longer be required to file periodic reports with the U.S. Securities and Exchange
the Merger Effective Time (a) each Check-Cap ordinary share issued and outstanding immediately prior to the Merger Effective Time