Check-Cap Reports Fourth Quarter and Full Year 2020 Financial Results
03/19/2021 - 07:00 AM
ISFIYA, Israel , March 19, 2021 /PRNewswire/ -- 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 (CRC), today announced financial results for the fourth quarter and full year ended December 31, 2020 .
2020 and Recent Highlights:
The U.S. Food and Drug Administration (FDA) has approved the Company's Investigational Device Exemption (IDE) application permitting Check-Cap to begin a pivotal study of C-Scan in the U.S. The FDA has granted the Company a Breakthrough Device Designation for C-Scan. During the full year 2020, Check-Cap strengthened its balance sheet through aggregate gross proceeds of $25.9 million $19.2 million The Company continues to optimize C-Scan's functionality and patient experience in preparation for the upcoming U.S. pivotal study expected to commence in late 2021, through additional clinical data collection at Israeli sites. "We ended 2020 optimistically as we look forward to accomplishing our next significant milestone, the commencement of our U.S. pivotal study in late 2021," said Alex Ovadia , Chief Executive Officer of Check-Cap. "The IDE approval granted by the FDA provides us with the opportunity to demonstrate the clinical efficacy of C-Scan in the U.S., and upon success, to potentially launch our product in the U.S. market," Mr. Ovadia concluded.
Financial Results for the Fourth Quarter Ended December 31, 2020
Research and development expenses, net, were $2.8 million December 31, 2020 and three months ended December 31 , 2019.
General and administrative expenses were $1.1 million December 31, 2020 , compared to $1.0 million $0.05 million $0.05 million
Operating loss was $3.9 million December 31, 2020 , compared to an operating loss of $3.8 million
Finance income, net was $24,000 for the three months ended December 31, 2020 , compared to $19,000 for the same period in 2019.
Net loss was $3.9 million December 31, 2020 , compared to $3.8 million
Cash and cash equivalents, restricted cash and short-term bank deposits as of December 31, 2020 were $18.1 million $8.0 million December 31, 2019 . Subsequent to the end of the fourth quarter, in the first quarter of 2021, certain existing warrant holders exercised warrants to purchase an aggregate 24,204,682 ordinary shares, which had been issued in 2020, at exercise prices ranging from $0.75 -$0.80 , which generated total gross proceeds of approximately $19.2 million
The number of outstanding ordinary shares as of December 31, 2020 was 46,239,183. As of March 16, 2021 , the number of outstanding ordinary shares was 70,448,422.
Financial Results for the Twelve Months Ended December 31, 2020
Research and development expenses, net, were $10.0 million December 31, 2020 , compared to $10.5 million $0.7 million $0.4 million $0.3 million $0.8 million $0.1 million
General and administrative expenses were $3.9 million December 31, 2020 , compared to $3.6 million $0.2 million $0.1 million $0.2 million $0.2 million
Operating loss was $13.9 million December 31, 2020 , compared to $14.1 million
Finance income, net, was $86,000 for the twelve months ended December 31, 2020 , compared to $233,000 for the same period in 2019. The decrease in finance income, net is primarily due to a decrease of $176,000 of interest income of short-term deposits recorded for the year ended December 31, 2020 , as compared to the year ended December 31, 2019 .
Net loss was $13.8 million December 31, 2020 and for the twelve months ended December 31, 2019 .
Net cash used in operating activities was $13.1 million December 31, 2020 , compared to $12.8 million
A copy of the Company's annual report on Form 20-F for the year ended December 31, 2020 has been filed with the U.S. Securities and Exchange Commission at www.sec.gov and posted on the Company's investor relations website at http://ir.check-cap.com/home . The Company will deliver a hard copy of its annual report, including its complete audited consolidated financial statements, free of charge, to its shareholders upon request to Mira Rosenzweig , Chief Financial Officer, at mira.rosenzweig@check-cap.com .
About Check-Cap
Check-Cap is a clinical stage medical diagnostics company aiming to redefine colorectal cancer (CRC) screening through the introduction of C-Scan®, the first and only patient-friendly preparation-free screening test 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 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 as it travels naturally along the gastrointestinal tract. C-Scan is non-invasive and requires no sedation. Unlike other capsule technologies, it requires no bowel preparation, allowing the patients to continue their daily routine with no interruption. C-Scan is not intended to replace colonoscopy. A positive C-Scan result should be followed by colonoscopy.
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, 2020 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 ikoffler@lifesciadvisors.com
Meirav Gomeh-BauerMeirav@lifesciadvisors.com
Media Contact
Mónica Rouco Molinamroucomolina@lifescicomms.com
CHECK CAP LTD.
December 31,
2020
2019
Assets
Current assets
Cash and cash equivalents
7,703
7,685
Restricted cash
350
350
Short-term bank deposit
10,079
-
Prepaid expenses and other current assets
285
400
Total current assets
18,417
8,435
Non-current assets
Property and equipment, net
823
540
Operating leases
398
454
Total non-current assets
1,221
994
Total assets
19,638
9,429
Liabilities and shareholders' equity
Current liabilities
Accounts payable and accruals
Trade
862
989
Other
345
490
Employees and payroll accruals
1,510
1,101
Operating lease liabilities
264
222
Total current liabilities
2,981
2,802
Non-current liabilities
Royalties provision
154
182
Operating lease liabilities
125
211
Total non-current liabilities
279
393
Shareholders' equity
Share capital, Ordinary shares, 2.4 NIS par value (360,000,000 and 90,000,000 authorized shares as
of December 31, 2020 and 2019, respectively; 46,239,183 and 8,272,908 shares issued and
outstanding as of December 31, 2020 and 2019, respectively)
31,646
5,407
Additional paid-in capital
75,715
77,964
Accumulated deficit
(90,983)
(77,137)
Total shareholders' equity
16,378
6,234
Total liabilities and shareholders' equity
19,638
9,429
CHECK CAP LTD.
Year
Three months
ended
ended
December 31,
December 31 ,
2020
2019
2020
2019
Research and development expenses, net
10,008
10,474
2,831
2,819
General and administrative expenses
3,924
3,595
1,102
1,028
Operating loss
13,932
14,069
3,933
3,847
Finance income, net
86
233
24
19
Loss before income tax
13,846
13,836
3,909
3,828
Net loss for the period
13,846
13,836
3,909
3,829
Other Comprehensive loss:
Net loss
13,846
13,836
3,909
3,829
Change in fair value of cash flow hedge
-
(13)
-
-
Comprehensive loss
13,846
13,823
3,909
3,829
Loss per share:
Net loss per ordinary share basic and diluted
0.46
1.73
0.08
0.46
Weighted average number of ordinary shares
thousands)
30,351
7,986
46,236
8,270
CHECK-CAP LTD.
Year ended
Three months ended
December 31,
December 31,
2020
2019
2020
2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
(13,846)
(13,836)
(3,909)
(3,829)
Adjustments required to reconcile net loss to net cash
used in operating activities:
Depreciation
148
115
41
31
Share-based compensation
408
516
91
110
Financial expenses (income), net
7
40
34
85
Changes in assets and liabilities items:
Decrease (increase) in prepaid and other current assets and
106
(420)
-
(383)
Increase (decrease) in trade accounts payable, accruals and
(317)
503
(22)
399
Increase (decrease) in employees and payroll accruals
409
242
303
266
Decrease in royalties provision
(28)
(3)
(34)
(10)
Net cash used in operating activities
(13,113)
(12,843)
(3,496)
(3,331)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment
(379)
(167)
(86)
(36)
Proceeds from (Investment in) short-term bank and other
(10,072)
5,612
4,931
3,939
Net cash provided by (used in) investing activities
(10,451)
5,445
4,845
3,903
CASH FLOWS FROM FINANCING ACTIVITIES
Exercise of warrants into ordinary shares
-
-
-
-
Issuance of ordinary shares and warrants in the warrant exercise
8,712
-
Issuance of ordinary shares in the private placement, net of
4,731
-
Issuance of ordinary shares in the registered direct offerings,
10,139
6,511
-
-
Net cash provided by financing activities
23,582
6,511
-
-
Net increase (decrease) in cash, cash equivalents and
18
(887)
1,349
572
Cash, cash equivalents and restricted cash at the
8,035
8,922
6,704
7,463
Cash, cash equivalents and restricted cash at the end of
8,053
8,035
8,053
8,035
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SOURCE Check-Cap Ltd.
