U.S. Markets open in 2 hrs 21 mins

Check-Cap Reports First Quarter 2018 Financial Results

ISFIYA, Israel, May 17, 2018 /PRNewswire/ --Check-Cap Ltd. (the "Company" or "Check-Cap") (CHEK) (CHEKW) (CHEKZ), a clinical stage medical diagnostics company engaged in the development of C-Scan®, an ingestible capsule preparation-free, colorectal cancer screening, today announced financial results for the first quarter ended March 31, 2018.

Check Cap Logo

Recent Highlights

  • Initiated an EU post approval study using C-Scan system Version 3 that incorporates the latest algorithms and system optimization and tailors scanning of the colon to the patient's natural colonic movements to maximize the amount of the colon that is tracked and imaged. As reported in an interim clinical study of C-Scan Version 3 in March 2018, evaluable results of 21 patients showed average colon imaging coverage of 64%, a 40% improvement over 46% average colon imaging coverage in the CE Mark study. Based on these results, we believe that C-Scan Version 3 has demonstrated significant improvement in average colon imaging coverage compared with the C-Scan version used in the multi-center clinical study that supported the Company's CE Mark approval received in January 2018.
  • Applied to register the C-Scan Version 3 system for marketing and sale in Israel.
  • Regained compliance with Nasdaq minimum bid price requirement. The Company announced and began to trade on the NASDAQ Capital Market on a post 1-for-12 reverse share split adjusted basis in April 2018.
  • Manufacturing collaboration with GE Healthcare ("GE") continues to progress towards U.S. pilot trial initiation.
  • Closed a $20.2 million underwritten public offering (including the exercise in full of the underwriter's option to purchase additional securities) of 3,189,381 units with each unit consisting of one ordinary share (or ordinary share equivalent) and one Series C warrant to purchase one ordinary share, along with the exercise in full by the underwriter of its option to purchase an additional 478,407 ordinary shares and Series C warrants to purchase up to 478,407 ordinary shares ("Offering").
  • Appointed Alex Ovadia as Chief Executive Officer. Prior to this appointment, Mr. Ovadia served as Check-Cap's Chief Operating Officer, Vice President of Research and Development and Israeli site manager since 2013.

Alex Ovadia, CEO of Check-Cap, stated: "We are pleased to report progress on key initiatives entering 2018.  Following completion of our public offering, we now have resources to continue to execute on our plan to commercialize our proprietary C-Scan system, providing patients with a preparation free alternative for pre-cancerous polyps screening in the colon. Our EU post approval study is underway, with interim results expected in the Q3, 2018, and we have commenced regulatory processes to enter the Israel market, where we hope to receive approval for marketing also in Q3, 2018. In the U.S., we continue to hold productive discussions with regulatory agencies and clinical partners for a planned pilot study initiation in the Q4, 2018."

Financial Results for the First Quarter Ended March 31, 2018

Research and development expenses, net were $1.6 million for the three months ended March 31, 2018, compared to $1.9 million for the same period in 2017. The decrease was primarily due to a $289,000 decline in salaries and related expenses as a result of reduction in head count.

General and administrative expenses were $490,000 for the three months ended March 31, 2018, compared to $890,000 for the same period in 2017. The decrease was primarily due to lower share based compensation due to reversal of expenses associated with an equity award of the Company's former CEO which was forfeited as a result of his separation from employment. This was partially offset by an increase in salary and related expenses due to a onetime payment to the Company's former CEO as a result of his separation from employment.

Operating loss was $2.1 million for the three months ended March 31, 2018, compared to an operating loss of $2.8 million for the same period in 2017.

Financial expenses, net was $21,000 for the three months ended March 31, 2018, compared to $110,000 income for the same period in 2017.

Net loss was $2.1 million for the three months ended March 31, 2018, compared to $2.7 million for the same period in 2017.

Non-GAAP net loss, as defined below, was $2.5 million for the three months ended March 31, 2018, compared to $2.4 million for the same period in 2017. A reconciliation of GAAP results to non-GAAP results is provided below.

Cash and cash equivalents were $4.6 million as of March 31, 2018, compared with $7 million as of December 31, 2017. Cash and cash equivalents as of March 31, 2018 on a pro-forma basis to give effect to the net proceeds received from the sale of securities in the Offering were $22.6 million.

Net cash used in operating activities was $2.3 million for the three months ended March 31, 2018, compared to $2.3 million for the same period in 2017.

The number of outstanding ordinary shares as of March 31, 2018 was 1,609,133.  On May 14, 2018, following the completion of the public offering, the total number of outstanding ordinary shares was 5,013,224 (or 5,290,497 ordinary shares assuming the exercise in full of the remaining outstanding pre-funded warrants to purchase 277,273 ordinary shares that were issued in the Offering).

About Check-Cap

Check-Cap is a clinical-stage medical diagnostics company developing C-Scan®, an ingestible capsule-based system for preparation-free colorectal cancer screening.

Utilizing innovative ultra-low dose X-ray and wireless communication technologies, the capsule generates information on the contours of the inside of the colon as it passes naturally. This information is used to create a 3D map of the colon, which allows physicians to look for polyps and other abnormalities. Designed to improve the patient experience and increase the willingness of individuals to participate in recommended colorectal cancer screening, C-Scan removes many frequently-cited barriers, such as laxative bowel preparation, invasiveness and sedation.

Use of Non-GAAP Financial Results

In addition to disclosing financial results calculated in accordance with U.S. GAAP, the Company's financial results release contains Non-GAAP financial measures of net loss for the period that exclude the effects of share-based compensation and changes in royalties provision. The Company's management believes the Non-GAAP financial information provided in this release is useful to investors' understanding and assessment of the Company's on-going operations.  Management also uses both GAAP and Non-GAAP information in evaluating and operating business internally and as such deemed it important to provide all this information to investors. The Non-GAAP financial measures disclosed by the Company should not be considered in isolation or as a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. Reconciliations between GAAP measures and Non-GAAP measures are provided later in this press release.

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 "Forward-looking Statements" and "Risk Factors" in the Company's Annual Report on Form 20-F for its fiscal year ended December 31, 2017 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. 

 

[Financial Tables to Follow]

 

 

CHECK CAP LTD

CONSOLIDATED UNAUDITED BALANCE SHEETS

 (U.S. dollars in thousands, except share and per share data)

















March 31,



December 31,     





2018



2017



Assets








Current assets








Cash and cash equivalents



4,644




6,997



Prepaid expenses and other current assets



398




406



Total current assets



5,042




7,403













Non-current assets










Property and equipment, net



469




503



Total non-current assets



469




503



Total assets



5,511




7,906













Liabilities and shareholders' equity










Current liabilities










Accounts payable and accruals










  Trade



644




608



  Other



301




347



Other current liabilities



4




5



Employees and payroll accruals



763




602



Total current liabilities



1,712




1,562













Non-current liabilities










Royalties provision



457




439



Total non-current liabilities



457




439













Shareholders' equity










Share capital



975




974



Additional paid-in capital



57,206




57,643



Accumulated deficit



(54,839)




(52,712)



Total shareholders' equity



3,342




5,905













Total liabilities and shareholders' equity



5,511




7,906



 

 

CHECK-CAP LTD.

CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except per share data)




Three months ended

March 31,




2018



2017






Research and development expenses, net



1,620




1,877


General and administrative expenses



485




886


Operating loss



2,105




2,763











Financial income (expenses), net



(21)




110


Loss before tax



2,126




2,653


Taxes on income



1




3


Net loss



2,127




2,656











 Net loss per ordinary share basic and diluted



1.27




1.94











Weighted average number of ordinary shares outstanding - basic and diluted (in thousands)



1,674




 

1,368



 

 

CHECK-CAP LTD.

CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands, except per share data)




Three months ended

March 31,




2018



2017


CASH FLOWS FROM OPERATING ACTIVITIES




Net loss for the period



(2,127)




(2,656)


Adjustments required to reconcile net loss to net cash used in operating activities:









Depreciation and amortization



43




36


Share-based compensation



(436)




214


Financial income, net



14




(138)


Changes in assets and liabilities items:









Decrease (increase) in prepaid and other current assets and non-current assets



8




(199)


Increase (decrease) in trade accounts payable, accruals and other current liabilities



(19)




180


Increase in employees and payroll accruals



161




193


Increase in royalties provision



18




24


Net cash used in operating activities



(2,338)




(2,346)











CASH FLOWS FROM INVESTING ACTIVITIES









Purchase of property and equipment



(1)




(66)


Proceeds from short-term investments



-




-


Net cash provided by (used in) investing activities



(1)




(66)











CASH FLOWS FROM FINANCING ACTIVITIES









Exercise of warrants into ordinary shares



-




15


Net cash provided by financing activities



-




15











Effect of exchange rate changes on cash and cash equivalents



(14)




138


Net decrease in cash and cash equivalents



(2,353)




(2,259)


Cash and cash equivalents at the beginning of the period



6,997




11,639


Cash and cash equivalents at the end of the period



4,644




9,380


 

 

CHECK-CAP LTD.

SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS

 (U.S. dollars in thousands)



















Three months ended


March 31,



2018



2017


GAAP net loss for the period



(2,127)




(2,656)


Share-based compensation (1)



(436)




214


Changes in royalties



18




24


Non-GAAP net loss for the period



(2,545)




(2,418)


 (1) Share-based compensation:







Research and development expenses, net



24




44


General and administrative expenses:



42




170


General and administrative expenses

One-time reversal of expenses for equity award of the Company's former CEO as a result of separation from employment



(502)




-





(436)




214



 

 

Investor Contacts

Vivian Cervantes
PCG Advisory
+1-646-863-6274
vivian@pcgadvisory.com

Meirav Gomeh-Bauer
+972-54-4764979
Meirav@bauerg.com

Cision

View original content:http://www.prnewswire.com/news-releases/check-cap-reports-first-quarter-2018-financial-results-300650236.html

  • Facebook under fire as US officials back removal of Zuckerberg as chairman
    Business
    The Telegraph

    Facebook under fire as US officials back removal of Zuckerberg as chairman

    Mark Zuckerberg came under fresh pressure after four US officials called for a boardroom shakeup at Facebook. Three state treasurers and a top official from New York have joined a shareholders’ motion to install an independent chairman at Facebook, claiming the move would improve governance and accountability. In June, Boston-based Trillium Asset Management, which holds $11m in Facebook shares, launched an effort to split the role of chairman and chief executive at Facebook following scandals over the hacking of personal data from millions of users and claims of hate speech and election-rigging.

  • Ken Langone: 'Who the hell in their right frame of mind would be buying bonds now?'
    Business
    Yahoo Finance

    Ken Langone: 'Who the hell in their right frame of mind would be buying bonds now?'

    Billionaire investor and philanthropist Ken Langone, the founder of The Home Depot (HD) and chairman of Invemed Associates, argued that there’s some “big time” structural problems in the market right now. Because if we are on a trajectory of raising rates that means, and if it keeps going that way and I don’t know how high it will go, and it keeps going that way then all the sudden the guy who bought those bonds is going to be looking at a fairly decent loss,” Langone said.

  • A former GE exec who trained new managers found that almost all of them were making the same mistake
    Business
    Business Insider

    A former GE exec who trained new managers found that almost all of them were making the same mistake

    Beth Comstock is the former vice chair of General Electric. Comstock would hand out "permission slips" authorizing employees to take risks — but she also said it's important for people to stop hiding behind their excuses. Beth Comstock doesn't tolerate excuses.

  • Rosenstein says Mueller investigation is ‘appropriate and independent’: report
    Politics
    Fox Business Videos

    Rosenstein says Mueller investigation is ‘appropriate and independent’: report

    Former federal prosecutor Sidney Powell and Judicial Watch Director of Investigations Chris Farrell on how Deputy Attorney General Rod Rosenstein told the Wall Street Journal that special counsel Robert Mueller’s Russia investigation is “appropriate and independent.”

  • Business
    Benzinga

    KeyCorp's Q3 Earnings Preview

    KeyCorp (NYSE: KEY) unveils its next round of earnings Thursday. Get prepared with Benzinga's ultimate preview for KeyCorp's Q3 earnings. Earnings and Revenue Wall Street expects EPS of 45 cents and sales around $1.64 billion. KeyCorp reported a profit

  • Alibaba (BABA) Dips More Than Broader Markets: What You Should Know
    Finance
    Zacks

    Alibaba (BABA) Dips More Than Broader Markets: What You Should Know

    Investors will be hoping for strength from BABA as it approaches its next earnings release, which is expected to be November 2, 2018. On that day, BABA is projected to report earnings of $1.16 per share, which would represent a year-over-year decline of 10.08%. Investors should also note any recent changes to analyst estimates for BABA.

  • Business
    CNBC

    Walmart saves $200 million by changing its light bulbs and $20 million with a new floor wax

    Walmart says switching to LED lights in its parking lots cut its annual energy costs by $200 million. A change in the floor wax it uses cut costs by $20 million a year because the floors need to be buffed less often. It's exactly what Walmart WMT is doing.

  • Pot Stocks Tumble in First Hours of Canada’s Legal Weed Market
    Business
    Bloomberg

    Pot Stocks Tumble in First Hours of Canada’s Legal Weed Market

    (Bloomberg) -- Canada’s Green Day started in the red for stocks looking to benefit from the country’s legalization of recreational marijuana. By the end of the day, a few advancers emerged from the downdraft.Pyxus International Inc. and Green Organic

  • You've won the Mega Millions jackpot. Now what?
    Business
    Associated Press

    You've won the Mega Millions jackpot. Now what?

    Despite the terrible odds — one in 302.5 million for those keeping score at home — someone will eventually match all six numbers and win the Mega Millions jackpot, now at $900 million. Here are some answers for someone holding that prized lottery ticket. Lottery officials recommend winners take a deep breath, put their winning ticket in a safe spot and consult with a reputable financial planner before popping over to the lottery headquarters.

  • Social Security Checks Are Increasing: What Does That Mean For You?
    Business
    Fortune

    Social Security Checks Are Increasing: What Does That Mean For You?

    Social Security checks will see their biggest increase in four years as 2019 kicks off. The Social Security Administration has approved a 2.8% cost of living adjustment (COLA) for next year. That follows a 2% jump this year and an increase of just

  • Intel restructures manufacturing organization
    Finance
    American City Business Journals

    Intel restructures manufacturing organization

    Chip giant Intel is restructuring its technology and manufacturing business group as it chases more connected device markets and grapples with delays on its next chip generation. In a memo to employees, reviewed by the Business Journal, Group President and Chief Engineering Officer Murthy Renduchintala described splitting the technology and manufacturing business into three groups. The three new groups are technology development, manufacturing and operations and global supply chain.

  • Why American Airlines Group Stock Jumped 6% -- Then Gave Most of It Back
    Business
    Motley Fool

    Why American Airlines Group Stock Jumped 6% -- Then Gave Most of It Back

    Shares of American Airlines Group (NASDAQ: AAL) popped 6.4% in early trading Wednesday before retracting to close the day up less than 1% -- just 0.9%, to be precise. An upgrade assigned to the stock by Deutsche Bank appears to be the primary reason for the move. A Deutsche Bank analyst upgraded American Airlines stock from "hold" to "buy" on Wednesday, as we're told by our friends at StreetInsider.com.

  • Advanced Micro Devices (AMD) Q3 Earnings Preview: Here's What to Look Out For
    Business
    Zacks

    Advanced Micro Devices (AMD) Q3 Earnings Preview: Here's What to Look Out For

    Advanced Micro Devices (AMD) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended September 2018. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The earnings report, which is expected to be released on October 24, 2018, might help the stock move higher if these key numbers are better than expectations.

  • Employee Accused of Urinating on Production Line at Food Processing Facility
    Business
    WTKR - Norfolk

    Employee Accused of Urinating on Production Line at Food Processing Facility

    Smithfield Foods, Inc. said in a statement Tuesday that it disposed of more than 50,000 pounds of product after reports of an employee urinating at his station at the company’s processing facility in Virginia.

  • These 3 Retailers Will Benefit From the Death of Sears
    Business
    Motley Fool

    These 3 Retailers Will Benefit From the Death of Sears

    Sears Holdings (NASDAQ: SHLD) recently filed for bankruptcy protection and announced that it will close nearly 200 stores by the end of the year. Sears still hopes to operate at least 400 stores going forward, but their fate remains uncertain as the company undergoes a painful restructuring to alleviate its billions of dollars in debt. Sears' bankruptcy was telegraphed years ago, as the retailer struggled with declining mall traffic and intense competition from superstores and Amazon.com (NASDAQ: AMZN).

  • Better Buy: The Home Depot, Inc. vs. Lowe's
    Business
    Motley Fool

    Better Buy: The Home Depot, Inc. vs. Lowe's

    Home Depot (NYSE: HD) and Lowe's (NYSE: LOW) have helped countless homeowners increase the value of their homes. They've also made many investors rich. With their shares having soared 879% and 484%, respectively, over the past decade, Home Depot and Lowe

  • Finance
    InvestorPlace

    Kinder Morgan Stock Slides on Q3 Revenue Miss

    Kinder Morgan (NYSE:KMI) stock was falling slightly after hours Wednesday as the company reported its latest quarterly earnings results late in the day, which included earnings that came in ahead of what analysts were calling for, but the company’s revenue was below Wall Street’s expectations. For its third quarter of fiscal 2018, the natural gas company posted earnings of $732 million, which came in at about roughly 31 cents per share. In the year-ago quarter, Kinder Morgan posted adjusted earnings of 15 cents per share.

  • Business
    Benzinga

    A Preview Of Bank Of New York Mellon's Q3 Earnings

    Bank of New York Mellon (NYSE: BK) releases its next round of earnings this Thursday. Get the latest predictions in Benzinga's essential guide to the company's Q3 earnings report. Earnings and Revenue Bank of New York Mellon EPS is expected to be around

  • Housing Stocks Tumble Midday; Home Depot Dents Dow
    Finance
    Investing.com

    Housing Stocks Tumble Midday; Home Depot Dents Dow

    Investing.com - Home Depot (NYSE:HD) and other housing-leveraged stocks fell in midday trading following disappointing data on home construction. Home Depot fell about 4.2% at 12:08 PM ET (16:08 GMT) and was a drag on the Dow Jones Industrial Average

  • Ford (F) Dips More Than Broader Markets: What You Should Know
    Business
    Zacks

    Ford (F) Dips More Than Broader Markets: What You Should Know

    Ford (F) closed the most recent trading day at $8.76, moving -0.45% from the previous trading session. This change lagged the S&P 500's daily loss of 0.03%. At the same time, the Dow lost 0.36%, and the tech-heavy Nasdaq lost 0.04%.Heading into today,

  • Business
    Benzinga

    Credit Suisse Downgrades Home Depot, Lowe's On Reduced Upside Projections

    Home improvement retailers remain Credit Suisse's best sector from a structural perspective, and the sell-side firm's expectations for earnings growth remain unchanged. Credit Suisse's Seth Sigman downgraded Home Depot Inc (NYSE: HD) from Outperform to Neutral with a price target lowered from $222 to $204. Home Depot remains a best-in-class within the entire retail group and is backed by a "superb" management team, Sigman said in the downgrade note.

  • GE to pay penalty if falls short of French job pledges: ministry
    Business
    Reuters

    GE to pay penalty if falls short of French job pledges: ministry

    General Electric's new CEO told France's finance minister on Wednesday that it would stick to his predecessor's French job pledges or pay a penalty, the Finance Ministry said. Former CEO John Flannery warned French Finance Minister Bruno Le Maire in June that the target was "out of reach", and the government raised the possibility of fines worth 50,000 euros ($57,570) for each job not created. GE's new CEO Larry Culp, who took up his post at the start of the month, told Le Maire in a meeting on Wednesday that France remained a strategic country for the company, the ministry said in statement.

  • Marijuana Stocks to Watch in October -- and Into 2019
    World
    Motley Fool

    Marijuana Stocks to Watch in October -- and Into 2019

    Tomorrow, Wednesday, Oct. 17, Canada will become the first industrialized county in the world where marijuana is legal for adult recreational use -- and only the second country, along with Uruguay, where such use is legal.  Not only does this open up

  • Boeing (BA) Q3 Earnings Preview: What to Expect
    Business
    Zacks

    Boeing (BA) Q3 Earnings Preview: What to Expect

    Boeing (BA) is expected to deliver a year-over-year increase in earnings on lower revenues when it reports results for the quarter ended September 2018. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The earnings report, which is expected to be released on October 24, 2018, might help the stock move higher if these key numbers are better than expectations.

  • Nvidia (NVDA) Dips More Than Broader Markets: What You Should Know
    Business
    Zacks

    Nvidia (NVDA) Dips More Than Broader Markets: What You Should Know

    Heading into today, shares of the maker of graphics chips for gaming and artificial intelligence had lost 9.29% over the past month, lagging the Computer and Technology sector's loss of 4.86% and the S&P 500's loss of 3.08% in that time. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.25 billion, up 23.44% from the year-ago period. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.