UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
 
 Form 6-K
 
 
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
 
For May 2020

Commission File No. 001-36848
 
 
Check-Cap Ltd.
 
Check-Cap Building
Abba Hushi Avenue
P.O. Box 1271
Isfiya, 30090
Mount Carmel, Israel
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES.)
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
 
Form 20-F ☒        Form 40-F ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
 
The financial statements included in the press release attached as Exhibit 99.1 to this Form 6-K are being incorporated by reference into the Post-Effective Amendment No. 1 to the Form S-8 Registration Statement File No. 333-203384, Form S-8 Registration Statement File No. 333-226490, and into the Form F-3 Registration Statements File Nos. 333-211065 and 333-225789.
Other Information
 
On May 27, 2020, Check-Cap Ltd. (the “Company”) provided certain corporate updates and announced its financial results for the first quarter of 2020. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
 
Exhibit
 
 
 
 
 
Exhibit No. 
 
Description
 
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
Check-Cap Ltd.
 
 
 
 
By:
/s/ Alex Ovadia
 
 
Name: Alex Ovadia
Date: May 27, 2020
 
Title: Chief Executive Officer

Exhibit 99.1

Check-Cap Reports First Quarter 2020 Financial Results and Provides Corporate Update
 
Strengthened balance sheet through a total of $16.3 million in registered direct offerings and a private
placement of ordinary shares in the first half of 2020
 
ISFIYA, Israel, May 27, 2020 -- Check-Cap Ltd. (the "Company" or "Check-Cap") (NASDAQ: CHEK), (NASDAQ: CHEKZ), a clinical stage medical diagnostics company advancing the development of C-Scan®, the first and only patient-friendly preparation-free screening test to detect polyps before they may transform into colorectal cancer, today announced financial results for the first quarter ended March 31, 2020.
 
Q1 2020 and Recent Highlights:
 
•
Strengthened balance sheet through a total of $16.3 million in registered direct offerings and a private placement of ordinary shares in the first half of 2020.
•
Made continued progress with the IDE submission process, towards the initiation of a US pivotal study of C-Scan in 2021.
•
In April 2020, as a consequence of the COVID-19 pandemic, the Company communicated it was taking all necessary precautions to ensure the safety and well-being of its employees and their families in accordance with the directive of the Israel Ministry of Health, including enabling the majority of employees to work remotely and the rest to continue working from the Company’s headquarters. In parallel, the Company temporarily suspended interactions between hospitals and healthcare professionals with its employees and clinical trial patients. The Company temporarily implemented several cost saving measures, including a temporary 15% salary reduction for all employees and management and the board of directors’ fees.  Also, the Company lowered monthly expenditures by placing several employees on unpaid leave and postponing certain lower priority activities. As a result of lowering infection rates in Israel, the lifting of many of the government restrictions to control the spread of the virus and its recent fundraisings, the Company has begun to resume normal operations and expects to resume clinical trials in Israel in June 2020.
“I'm grateful to our team for their dedication through these challenging and unusual times and for their tireless efforts to maintain momentum towards achieving our corporate objectives. We are encouraged by the ongoing lifting of restrictions in Israel which enables us to gradually resume normal operations,” said Alex Ovadia, chief executive officer of Check-Cap “We recently completed a total of $11.5 million in capital raises through registered direct offerings, in addition to the $4.7 million private placement completed in February 2020. This allows us to continue progressing towards IDE submission with the FDA while in parallel taking the necessary steps towards getting C-Scan ready for our planned US pivotal study in 2021.  We also continue to explore potential collaborations with strategic industry leaders,” Mr. Ovadia concluded.
 
Financial Results for the First Quarter Ended March 31, 2020
 
Research and development expenses, net were $2.5 million for the three months ended March 31, 2020, compared to $2.3 million for the same period in 2019.  The increase is primarily due to a $0.3 million increase in salaries and related expenses, offset in part by a $0.1 million decrease in cost of materials, subcontractor and consultant expenses and clinical trials expenses.
 
General and administrative expenses were $1.0 million for the three months ended March 31, 2020, compared to $0.8 million for the same period in 2019. The increase is primarily due to other general expenses.
 
Operating loss was $3.4 million for the three months ended March 31, 2020, compared to $3.2 million for the same period in 2019.
 
Net loss was $3.4 million for the three months ended March 31, 2020, compared to $3.2 million for the same period in 2019.
 
Cash and cash equivalents, restricted cash and short-term bank deposits as of March 31, 2020 were $9.3 million as compared to $8.0 million as of December 31, 2019. Subsequent to the end of the first quarter, the Company completed three registered direct offerings resulting in gross proceeds of $11.5 million (approximately $10.1 million net of offering expenses).
 
The number of outstanding ordinary shares as of March 31, 2020 was 10,999,719. As of May 26, 2020, the number of our outstanding ordinary shares was 30,171,012.
 
About Check-Cap
 
Check-Cap is a clinical stage medical diagnostics company aiming to redefine colorectal cancer (CRC) screening and prevention through the introduction of C-Scan®, the first and only patient-friendly preparation-free screening test to detect polyps before they may transform into cancer. The Company’s disruptive capsule-based screening technology aims to significantly increase screening adherence worldwide and help millions of 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.
 
Legal Notice Regarding Forward-Looking Statements
 
This press release contains "forward-looking statements." Words such as "may," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," and similar expressions, as well as statements in future tense, often signify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and may not be accurate indications of when such performance or results will be achieved. Forward-looking statements are based on information that the Company has when those statements are made or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. For a discussion of these and other risks that could cause such differences and that may affect the realization of forward-looking statements, please refer to the "Forward-looking Statements" and "Risk Factors" in the Company's Annual Report on Form 20-F for the year ended December 31, 2019 and other filings with the Securities and Exchange Commission (SEC). Investors and security holders are urged to read these documents free of charge on the SEC's web site at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.
 
Investor Contacts
 
Irina Koffler
LifeSci Advisors, LLC
646.970.4681
ikoffler@lifesciadvisors.com
 
Meirav Gomeh-Bauer
LifeSci Advisors, LLC
+972(0)-54-476-4979
Meirav@lifesciadvisors.com

 
CHECK CAP LTD.
CONSOLIDATED UNAUDITED BALANCE SHEETS
 (U.S. dollars in thousands except share data)
 
 
  
March 31,
    
December 31,
  
 
  
2 0 2 0
    
2 0 1 9
  
Assets
            
Current assets
            
Cash and cash equivalents
    
6,668
      
7,685
  
Restricted cash
    
350
      
350
  
Short-term bank deposit
    
2,255
      
-
  
Prepaid expenses and other current assets
    
301
      
400
  
Total current assets
    
9,574
      
8,435
  
 
                
Non-current assets
                
Property and equipment, net
    
623
      
540
  
Operating lease assets
    
399
      
454
  
Total non-current assets
    
1,022
      
994
  
Total assets
    
10,596
      
9,429
  
 
                
Liabilities and shareholders' equity
                
Current liabilities
                
Accounts payable and accruals
                
  Trade
    
789
      
989
  
  Other
    
422
      
490
  
Employees and payroll accruals
    
1,179
      
1,101
  
Operating lease liabilities- current
    
205
      
222
  
Total current liabilities
    
2,595
      
2,802
  
 
                
Non-current liabilities
                
Royalties provision
    
184
      
182
  
Operating lease liabilities- net of current portion
    
160
      
211
  
Total non-current liabilities
    
344
      
393
  
 
                
Shareholders' equity
                
Share capital, Ordinary shares, 2.4 NIS par value (90,000,000 authorized shares as of March 31, 2020 and December 31, 2019, respectively; 10,999,719 and 8,272,908 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively)
    
7,305
      
5,407
  
Additional paid-in capital
    
80,920
      
77,964
  
Accumulated deficit
    
(80,568
)
    
(77,137
)
Total shareholders' equity
    
7,657
      
6,234
  
 
                
Total liabilities and shareholders' equity
    
10,596
      
9,429
  

CHECK CAP LTD.
CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share data)

   
Three months ended
  
   
March 31,
  
   
2020
    
2019
  
Research and development expenses, net
    
2,462
      
2,339
  
General and administrative expenses
    
957
      
825
  
Operating loss
    
3,419
      
3,164
  
                 
Finance income (loss) net
    
(12
)
    
14
  
Loss before income tax
    
3,431
      
3,150
  
Net loss for the period
    
3,431
      
3,150
  
                 
Comprehensive loss:
                
Net loss
    
3,431
      
3,150
  
Change in fair value of cash flow hedge
    
-
      
(4
)
                 
Comprehensive loss
    
3,431
      
3,146
  
Loss per share:
                
Net loss per ordinary share basic and diluted
    
0.34
      
0.44
  
                 
Weighted average number of ordinary shares outstanding - basic and diluted (in
                
thousands)
    
9,971
      
7,114
  

 
CHECK CAP LTD.
CONSOLIDATED UNAUDITED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(U.S. dollars in thousands, except share and per share data)

 
  
Number of ordinary shares
    
Amount
    
Additional
paid-in capital
    
Other comprehensive loss
    
Accumulated
deficit
    
Total shareholders’ equity
  
                                     
Balance as of January 1, 2020
    
8,272,908
    
$
5,407
    
$
77,964
    
$
-
    
$
(77,137
)
  
$
6,234
  
Issuance of ordinary shares in private placement, net of issuance expenses in an amount of $30
    
2,720,178
      
1,894
      
2,837
      
-
      
-
      
4,731
  
    RSU’s vesting
    
6,633
      
4
      
(4
)
                    
-
  
Share-based compensation
    
-
      
-
      
123
      
-
      
-
      
123
  
Net loss
    
-
      
-
      
-
      
-
      
(3,431
)
    
(3,431
)
Balance as of March 31, 2020
    
10,999,719
    
$
7,305
    
$
80,920
    
$
-
    
$
(80,568
)
  
$
7,657
  

(*) Represent amount less than 1 thousand.
CHECK CAP LTD.
CONSOLIDATED UNAUDITED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(U.S. dollars in thousands, except share and per share data)

 
  
Number of ordinary shares
    
Amount
    
Additional
paid-in capital
    
Other comprehensive loss
    
Accumulated
deficit
    
Total shareholders’ equity
  
                                     
Balance as of January 1, 2019
    
5,330,684
    
$
3,456
    
$
72,888
    
$
(13
)
  
$
(63,301
)
  
$
13,030
  
Issuance of ordinary shares in the 2019 registered direct Offering, net of issuance expenses in an amount of $987 (1)
    
2,906,376
      
1,928
      
4,583
      
-
      
-
      
6,511
  
    RSU’s vesting
    
718
      
(*
)
    
-
                      
(*
)
Share-based compensation
    
-
      
-
      
83
      
-
      
-
      
83
  
Other comprehensive loss
    
-
      
-
      
-
      
17
      
-
      
17
  
Net loss
    
-
      
-
      
-
      
-
      
(3,150
)
    
(3,150
)
Balance as of March 31, 2019
    
8,237,778
    
$
5,384
    
$
77,554
    
$
4
    
$
(66,451
)
  
$
16,491
  

(*) Represent amount less than 1 thousand.
CHECK-CAP LTD.
CONSOLIDATED  UNAUDITED STATEMENTS OF CASH FLOWS
  (U.S. dollars in thousands)
 
   
Three months ended
  
   
March 31,
  
   
2020
    
2019
  
CASH FLOWS FROM OPERATING ACTIVITIES
            
Net loss
    
(3,431
)
    
(3,150
)
Adjustments required to reconcile net loss to net cash used in operating activities:
                
Depreciation
    
34
      
28
  
Share-based compensation
    
123
      
83
  
Financial expenses (income), net
    
(14
)
    
-
  
Changes in assets and liabilities items:
                
Decrease (increase) in prepaid and other current assets and non-current assets
    
101
      
(116
)
Increase (decrease) in trade accounts payable, accruals and other current liabilities
    
(325
)
    
(375
)
Increase (decrease) in employees and payroll accruals
    
78
      
(240
)
Increase (decrease) in royalties provision
    
2
      
21
  
Net cash used in operating activities
    
(3,432
)
    
(3,749
)
                 
CASH FLOWS FROM INVESTING ACTIVITIES
                
Purchase of property and equipment
    
(57
)
    
(3
)
Proceeds from (investment in) short-term bank and other deposit
    
(2,258
)
    
(3,357
)
Net cash provided by (used in) investing activities
    
(2,315
)
    
(3,360
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES
                
Issuance of ordinary shares in the registered direct offerings, net of issuance expenses
    
-
      
6,511
  
Issuance of ordinary shares in the private placement
    
4,730
      
-
  
Net cash provided by financing activities
    
4,730
      
6,511
  
                 
Net increase (decrease) in cash, cash equivalents and restricted cash
    
(1,017
)
    
(598
)
Cash, cash equivalents and restricted cash at the beginning of the period
    
8,035
      
8,922
  
Cash, cash equivalents and restricted cash at the end of the period
    
7,018
      
8,324
  
Supplemental disclosure of non-cash flow information:
                
Purchase of property and equipment included in accounts payable and accrued expenses
    
59
      
-
  
Recognition of operating leases and operating lease liabilities from adoption of ASU 2016-02
    
-
      
369
  
Supplemental disclosure of cash flow information
                
Cash paid for taxes
    
-
      
-