MBody AI–Check-Cap (MBAI) reverse recapitalization shows 2025 profit and pro forma gains
Rhea-AI Filing Summary
Check-Cap Ltd. furnished audited 2025 financials for merger target MBody AI Corp. and unaudited pro forma combined results ahead of their planned merger. MBody AI reported 2025 net revenue of $2.4 million and net income of $507,851, driven mainly by customer subscription contracts accounted for as sales-type leases.
The pro forma combined statement for 2025 shows net income of $4.6 million, including $6.5 million of income on debt extinguishment and conversion at Check-Cap. MBody AI ended 2025 with total assets of $3.4 million, including $2.1 million of net investment in customer subscription contracts and $799,468 in cash, and had a current $400,000 related-party loan from Apollo Technology Capital. The merger, structured as a reverse recapitalization with MBody AI as the accounting acquirer and its holders owning about 90% of the combined company, is expected in the first half of 2026 but remains subject to capital, listing and regulatory conditions.
Positive
- None.
Negative
- None.
Insights
MBody AI brings a profitable, subscription-based AI robotics business into Check-Cap via a reverse recap.
The disclosure shows MBody AI as a young but profitable AI-robotics platform. For 2025 it generated $2.4M in net revenue and net income of $0.51M, with a core model built on sales-type customer subscription contracts that create a $2.09M net investment balance as of December 31, 2025.
The merger is accounted for as a reverse recapitalization, so MBody AI becomes the accounting acquirer while Check-Cap contributes a listed shell, cash, and investment assets. Pro forma 2025 net income of $4.65M is heavily influenced by Check-Cap’s one-time income on debt extinguishment of $6.53M, which is not an operating driver.
Post-close, MBody AI equity holders are expected to own about 90% of the combined company, with Check-Cap holders at roughly 10%. Completion in the first half of 2026 depends on satisfying Nasdaq capital and listing requirements and finishing regulatory and exchange reviews, so actual outcomes will hinge on closing progress and future combined financial disclosures.
Key Figures
Key Terms
sales-type contracts financial
reverse recapitalization financial
customer subscription contracts financial
net investment in sales-type contracts financial
net operating loss carryforwards financial
critical audit matter financial
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 the month of May 2026.
Commission File Number 001-36848
Check-Cap Ltd.
(Exact Name of Registrant as Specified in Charter)
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 ☐
This Form 6-K is being incorporated by reference into Check-Cap Ltd.’s Registration Statements on Form S-8 (File No. 333-203384, 333-203384 and 333-259666) filed with the Securities and Exchange Commission, to be a part thereof from the date on which this Report is submitted, to the extent not superseded by documents or reports subsequently filed or furnished.
Financial Information Regarding Merger with MBody AI Corp.
As previously disclosed, at the Annual General Meeting of Shareholders of Check-Cap Ltd. (the “Company” or “Check-Cap”) held on November 14, 2025, shareholders of the Company approved the merger (the “Merger”) of CC Merger Sub Inc., a Nevada corporation and a direct, wholly owned subsidiary of Check-Cap (the “Merger Sub”), with and into MBody AI Corp., a Nevada corporation (“MBody AI”), with MBody AI surviving and becoming a wholly-owned subsidiary of Check-Cap after the Merger, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), dated as of September 12, 2025, by and among MBody AI, the Merger Sub and Check-Cap.
Check-Cap and MBody AI continue to work towards closing the Merger and are filing the financial statements contained in the exhibits below in furtherance of the transaction. Check-Cap and MBody AI expect the Merger to consummate in the first half of 2026; however, the timing of the completion of the Merger is subject to various conditions and uncertainties, including the availability of sufficient capital to satisfy Nasdaq listing requirements and the completion of regulatory and exchange review processes, and there can be no assurance that the Merger will be completed within this timeframe or at all.
The financial statements of MBody AI as of December 31, 2025 and for the year ended, and as of December 31, 2024 and for the period from October 7, 2024 (date of formation) to December 31, 2024, have been audited by BCRG Group, an independent registered public accounting firm registered with the Public Company Accounting Oversight Board, as set forth in their report thereon. The audited financial statements and the auditor’s report are attached hereto as Exhibit 99.1 and are incorporated herein by reference.
The unaudited pro forma condensed combined balance sheet as of December 31, 2025 and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2025 are filed as Exhibit 99.2 hereto and are incorporated herein by reference. The unaudited pro forma condensed combined financial information that has been included as Exhibit 99.2 to this Report of Foreign Private Issuer on Form 6-K does not necessarily reflect what the Company’s results of operations, financial position or cash flows would have been during the periods presented had the Merger been completed in prior periods and does not necessarily indicate what the Company’s results of operations, financial position, cash flows or costs and expenses will be in the future.
Cautionary Statement Concerning Forward-Looking Statements
This Report on Form 6-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements, which include, among others, statements regarding the completion and timing of the Merger, the Company’s ability to maintain continued compliance with Nasdaq listing requirements, and the expected benefits of the Merger. These forward-looking statements are based on the Company’s current intentions, beliefs, and expectations regarding future events. Actual results may differ materially due to risks and uncertainties including, but not limited to, the satisfaction of closing conditions, the ability to complete the Merger on the anticipated timeline or at all, integration risks, customer concentration risks including the potential loss or termination of key customer contracts, the ability to develop and commercialize new products and features, market conditions, and other factors described in the Company’s Annual Report on Form 20-F for the year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission on April 27, 2026. The Company undertakes no obligation to update forward-looking statements except as required by law.
Exhibits
| Exhibit No. | Description | |
| 99.1 | Consolidated Audited Financial Statements of MBody AI Corp. as of December 31, 2025 and December 31, 2024, and for the year ended December 31, 2025, and for the period from October 7, 2024 (date of formation) to December 31, 2024 | |
| 99.2 | Unaudited pro-forma condensed combined financial information | |
| 99.3 | Consent of Independent Registered Public Accounting Firm |
1
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/ David Lontini | |
| Name: | David Lontini | |
| Title: | Interim Chief Executive Officer | |
Date: May 12, 2026
2
Exhibit 99.1
MBody AI Corp, Inc.
Index to Financial Statements
Table of Contents
| Page | |
| Report of Independent Registered Public Accounting Firm (PCAOB Firm ID: 7158) | 2 |
| Financial Statements | |
| Balance Sheets | 4 |
| Statements of Operations | 5 |
| Statements of Stockholders’ Equity | 6 |
| Statements of Cash Flows | 7 |
| Notes to Financial Statements | 8 |
1
 |
200 Spectrum Center |
| Drive, Suite 1300 Irvine, | |
| CA 92618 | |
| (714) 234-5980 | |
| www.bcrgcpas.com |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of MBody AI Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of MBody AI Corp. (the “Company”) as of December 31, 2025 and 2024, and the related statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2025 and for the period from October 7, 2024 (date of formation) to December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the year ended December 31, 2025 and for the period from October 7, 2024 (date of formation) to December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
2
Critical Audit Matter
Revenue Recognition for Customer Subscription Arrangements
The Company accounts for certain customer subscription arrangements as sales-type leases under ASC 842, resulting in the recognition of net investment in lease arrangements and upfront recognition of selling profit upon commencement of the arrangements. As of December 31, 2025, the Company recognized significant balances related to net investment in customer subscription arrangements and related subscription contract revenue. Auditing management’s accounting for these arrangements involved especially challenging and subjective auditor judgment due to the complexity of evaluating lease classification under ASC 842, including assessment of whether the arrangements met the criteria for sales-type lease accounting, determination of the present value of future contractual payments, and evaluation of the timing and amount of revenue recognized at commencement.
The principal considerations for our determination that auditing revenue recognition related to customer subscription arrangements was a critical audit matter included the significant judgment involved in evaluating management’s application of ASC 842 to the arrangements, the assumptions utilized in determining the present value of future payments, and the assessment of the related accounting treatment and disclosures.
Our audit procedures related to this matter included, among others:
| ● | Obtaining an understanding of management’s process for evaluating customer subscription arrangements under ASC 842; |
| ● | Inspecting a sample of executed customer agreements and evaluating lease classification conclusions; |
| ● | Testing management’s calculation of net investment in lease arrangements, including recalculation of the present value of future contractual payments; |
| ● | Evaluating the recognition of selling profit and related finance income; |
Assessing the reasonableness of significant assumptions utilized by management; and Evaluating the adequacy of related financial statement disclosures.
/s/ BCRG Group
BCRG Group (PCAOB ID 7158)
We have served as the Company’s auditor since 2025.
Irvine, CA
May 12, 2026
3
MBody AI Corp, Inc.
Balance Sheets
| December 31, | December 31, | |||||||||||
| Note | 2025 | 2024 | ||||||||||
| ASSETS | ||||||||||||
| Current Assets: | ||||||||||||
| Cash and cash equivalents | 2 | $ | 799,468 | $ | 94,333 | |||||||
| Inventories, net | 5 | - | 75,934 | |||||||||
| Loan to related party | 11 | 16,000 | - | |||||||||
| Net investment in customer subscription contracts – current | 4 | 824,841 | - | |||||||||
| Other current assets | - | 14,673 | ||||||||||
| Total current assets | 1,640,309 | 184,940 | ||||||||||
| Non-current Assets: | ||||||||||||
| Net investment in customer subscription contracts – non-current | 4 | 1,260,334 | - | |||||||||
| Property, plant and equipment, net | 6 | 545,985 | - | |||||||||
| Total non-current assets | 1,806,319 | - | ||||||||||
| Total assets | $ | 3,446,628 | $ | 184,940 | ||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
| Current Liabilities: | ||||||||||||
| Trade payables | 139,046 | - | ||||||||||
| Accrued expenses | 259,571 | 290 | ||||||||||
| Loans payable to shareholders and related parties | 7 | 416,000 | 183,202 | |||||||||
| Total current liabilities | 814,617 | 183,492 | ||||||||||
| Non-current Liabilities: | ||||||||||||
| Deferred tax liability | 8 | 43,626 | - | |||||||||
| Total non-current liabilities | 43,626 | - | ||||||||||
| Total liabilities | 858,243 | 183,492 | ||||||||||
| Commitments and contingencies | ||||||||||||
| Stockholders’ equity | ||||||||||||
| Common Stock - $0.00001 par value; 200,000,000 authorized shares; 153,366,667 shares and 35,900,000 shares issued and outstanding as of December 31, 2025 and 2024, respectively | 9 | 1,534 | 359 | |||||||||
| Additional paid-in-capital | 9 | 2,077,911 | - | |||||||||
| Accumulated retained earnings | 9 | 508,940 | 1,089 | |||||||||
| Total stockholders’ equity | 2,588,385 | 1,448 | ||||||||||
| Total liabilities and stockholders’ equity | $ | 3,446,628 | $ | 184,940 | ||||||||
The accompanying footnotes are an integral part of these financial statements.
4
MBody AI Corp, Inc.
Statements of Operations
| From | ||||||||||||
| October 7, 2024 | ||||||||||||
| Year Ended | (Date of formation) to | |||||||||||
| December 31, | December 31, | |||||||||||
| Note | 2025 | 2024 | ||||||||||
| Net Revenue | ||||||||||||
| Customer subscription contract revenue | 4 | $ | 2,209,792 | $ | - | |||||||
| Subscription interest income | 4 | 65,542 | - | |||||||||
| Product sales | 3 | 73,655 | 47,940 | |||||||||
| Services | 3 | 51,474 | - | |||||||||
| Other interest income | 19 | - | ||||||||||
| Total net revenue | 2,400,482 | 47,940 | ||||||||||
| Cost of Revenue | ||||||||||||
| Cost of revenue | 1,046,065 | 45,450 | ||||||||||
| Total cost of sales | 1,046,065 | 45,450 | ||||||||||
| Gross profit | 1,354,417 | 2,490 | ||||||||||
| Operating expenses: | ||||||||||||
| Selling, general and administrative expenses | 721,459 | 1,111 | ||||||||||
| Depreciation | 6 | 69,097 | - | |||||||||
| Interest expense | 7 | 12,384 | - | |||||||||
| Total operating expenses | 802,940 | 1,111 | ||||||||||
| Income before income tax provision | 551,477 | 1,379 | ||||||||||
| Income tax provision | 8 | 43,626 | 290 | |||||||||
| Net income | $ | 507,851 | $ | 1,089 | ||||||||
| Earnings Per Share: | ||||||||||||
| Net income (loss) per common share - basic and diluted | 10 | $ | 0.0034 | $ | 0.0000 | |||||||
| Weighted average number of common shares | 10 | 150,346,911 | 35,900,000 | |||||||||
The accompanying footnotes are an integral part of these financial statements.
5
MBody AI Corp, Inc.
Statement of Stockholders’ Equity
| Additional | Retained | |||||||||||||||||||||||
| Common Stock | Paid-in | Earnings | Total | |||||||||||||||||||||
| Note | # of Shares | Amount | Capital | (Deficit) | Equity | |||||||||||||||||||
| Balance – October 7, 2024 (date of formation) | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||
| Shares issued at formation | 9 | 35,900,000 | 359 | - | - | 359 | ||||||||||||||||||
| Net income | - | - | - | 1,089 | 1,089 | |||||||||||||||||||
| Balance – December 31, 2024 | 35,900,000 | 359 | - | 1,089 | 1,448 | |||||||||||||||||||
| Shares issued for cash | 9 | 117,466,667 | 1,175 | 2,077,911 | - | 2,079,086 | ||||||||||||||||||
| Net income | - | - | - | 507,851 | 507,851 | |||||||||||||||||||
| Balance – December 31, 2025 | 153,366,667 | $ | 1,534 | $ | 2,077,911 | $ | 508,940 | $ | 2,588,385 | |||||||||||||||
The accompanying footnotes are an integral part of these financial statements.
6
MBody AI Corp, Inc.
Statements of Cash Flows
| From | ||||||||||||
| October 7, 2024 | ||||||||||||
| Year Ended | (Date of formation) to | |||||||||||
| December 31, | December 31, | |||||||||||
| Note | 2025 | 2024 | ||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income | $ | 507,851 | $ | 1,089 | ||||||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||
| Depreciation | 6 | 69,097 | - | |||||||||
| Deferred income tax expense | 8 | 43,626 | - | |||||||||
| Customer subscription contract selling profit recognized at commencement | 4 | (1,163,727 | ) | - | ||||||||
| Standard-cost variance disposition (non-cash) | (46,395 | ) | ||||||||||
| Subscription interest income on net investment in customer subscription contracts | 4 | (65,542 | ) | - | ||||||||
| Cash paid for inventory for customer subscription contracts equipment | 5 | (617,000 | ) | - | ||||||||
| Changes in assets and liabilities: | ||||||||||||
| Decrease in inventories | 5 | 75,934 | (75,934 | ) | ||||||||
| Decrease in vendor deposits | 14,673 | (14,673 | ) | |||||||||
| Cash collected on subscription receivables | 4 | 190,159 | - | |||||||||
| Increase in accrued liabilities and other payables | 398,327 | 290 | ||||||||||
| Net cash used in operating activities | (592,997 | ) | (89,228 | ) | ||||||||
| Cash flows from investing activities: | ||||||||||||
| Purchase of property and equipment | 6 | (599,582 | ) | - | ||||||||
| Purchase of vehicles | 6 | (15,500 | ) | - | ||||||||
| Loan advanced to related party | 11 | (16,000 | ) | - | ||||||||
| Cash returned by procurement agent | 6 | 17,330 | - | |||||||||
| Net cash used in investing activities | (613,752 | ) | - | |||||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from issuance of common stock | 9 | 2,079,086 | 359 | |||||||||
| Net repayments to shareholders/related parties | 7 | (167,202 | ) | 183,202 | ||||||||
| Net cash provided by financing activities | 1,911,884 | 183,561 | ||||||||||
| Net increase in cash and cash equivalents | 705,135 | 94,333 | ||||||||||
| Cash and cash equivalents, beginning of period | 94,333 | - | ||||||||||
| Cash and cash equivalents, end of period | $ | 799,468 | $ | 94,333 | ||||||||
| Supplemental disclosures of cash flow information | ||||||||||||
| Cash paid during the periods for: | ||||||||||||
| Interest | $ | - | $ | - | ||||||||
| Income taxes | $ | - | $ | - | ||||||||
The accompanying footnotes are an integral part of these financial statements.
7
MBody AI Corp, Inc.
Notes to Financial Statements
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
MBody AI Corp. (the “Company”) is a corporation organized under the laws of the State of Nevada on October 7, 2024. The Company’s functional and reporting currency is the U.S. dollar. The Company’s legal headquarters and principal place of business is 9205 West Russell Road, Building 3, Suite 240, Las Vegas, NV 89148.
These financial statements are presented on a single-entity basis and the term “consolidated” is not used. In anticipation of the proposed merger with Check-Cap Ltd., pro-form combined financial information will be presented separately under Article 11 of SEC Regulation S-X as part of the relevant SEC filings; that pro-forma information is not included in these financial statements.
The Company is a Nevada-based artificial intelligence technology company that designs, integrates, and manages AI-enabled robotic and software systems for large commercial environments such as hotels, casinos, convention centers, and other high-traffic facilities. The Company’s core business model combines artificial intelligence software, robotic automation, and data analytics to deliver an operational efficiency solution to clients in the hospitality, property management, and commercial cleaning industries.
Historically, the Company operated under a hardware leasing model, purchasing robotic equipment from suppliers and deploying them at customer sites under multi-year customer subscription agreements. Beginning in 2025, the Company commenced a strategic transition toward a software-as-a-service (SaaS) and AI-platform subscription model, emphasizing recurring, high-margin software revenues over hardware ownership. Under this evolving model, MBody AI provides customers with continuous access to its proprietary software platform and AI-driven analytics suite that powers, monitors, and optimizes robotic systems deployed at customer sites. The Company’s December 31, 2025 results continue to reflect a mix of legacy lease-based contracts accounted for as customer subscription contracts with sales-type contract components and emerging SaaS / AI-service contracts accounted for under the revenue standard.
MBody AI operates primarily in the United States but maintains supplier relationships internationally for the sourcing of robotic hardware. The Company’s customers are primarily large-scale hospitality groups and other enterprise clients pursuing technology-driven operational automation.
On September 12, 2025, the Company entered into an Agreement and Plan of Merger with Check-Cap Ltd. (“Check-Cap”), a public company organized under the laws of Israel and listed on the Nasdaq Capital Market under ticker symbol “MBAI” (rebranded by Check-Cap in advance of the merger), pursuant to which the Company will become a wholly owned subsidiary of Check-Cap. For accounting purposes, the Company is the accounting acquirer in the merger. Check-Cap shareholders approved the merger in November 2025. The transaction had not been consummated as of December 31, 2025 or as of the date these financial statements were available to be issued; the merger remains subject to satisfaction of the remaining closing conditions and closing is expected to occur before the end of June 2026. The Company therefore remains a private company through the date these financial statements were available to be issued and these financial statements have been prepared on a stand-alone (single-entity) basis under U.S. GAAP applicable to a private company.
8
MBody AI Corp, Inc.
Notes to Financial Statements
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The Company has no subsidiaries at December 31, 2025 or December 31, 2024; accordingly, the financial statements are presented on a single-entity basis and consolidation procedures under ASC 810 are not applicable.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions include, but are not limited to, the discount rate used in measuring net investment in sales-type contracts in accordance with U.S. GAAP, the determination of the residual value of contracted equipment, the estimated useful lives of property and equipment, the realizability of deferred tax assets, the fair value of equity instruments issued for services, and contingencies. Actual results could differ from those estimates.
Segment Reporting
In accordance with the segment reporting standard, operating segments are identified as components of an enterprise about which separate financial information is available for evaluation by the chief operating decision-maker (“CODM”) in making decisions regarding resource allocation and assessing performance. The Company’s CODM is its Chief Executive Officer. The CODM reviews financial performance and makes resource allocation decisions on the basis of consolidated entity-level results, and does not regularly receive disaggregated financial information for separate operating components. Accordingly, the Company has determined that it operates as a single operating and reportable segment. This conclusion is consistent with the audited financial statements for the six months ended June 30, 2025.
Because the Company has only one reportable segment, segment-level disclosures otherwise required by the segment reporting standard, including the additional disaggregated segment expense disclosures introduced by ASU 2023-07 (effective for fiscal years beginning after December 15, 2023), are not separately presented; entity-wide financial information presented in the face statements and the related notes constitutes the complete segment disclosure.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Cash balances are maintained in deposit accounts at major U.S. financial institutions and at times exceed amounts insured by the Federal Deposit Insurance Corporation.
Accounts Receivable and Allowance for Credit Losses
Trade accounts receivable, when present, are recorded at the invoiced amount and are not interest-bearing. The Company’s net investment in customer subscription agreements are within the scope of ASC 326 (Financial Instruments — Credit Losses, Measured at Amortized Cost). The Company’s customers are predominantly large enterprise hospitality customers with strong credit profiles. Based on management’s evaluation of (i) the credit standing of each lessee, (ii) the absence of any historical loss experience or contractual default since the Company’s inception, and (iii) current and reasonably supportable forecasts of macroeconomic conditions, the Company concluded that expected credit losses on its trade and customer subscription contracts were not material. Accordingly, no allowance for credit losses was recorded as of December 31, 2025 or December 31, 2024. This conclusion is consistent with the audited financial statements for the six months ended June 30, 2025.
Inventories
Inventories consist primarily of robotic hardware purchased from third-party suppliers for deployment under customer contracts. Inventory is stated at the lower of cost or net realizable value using the weighted-average cost method which approximates actual cost, in accordance with U.S. GAAP for inventories. Cost includes purchase price, freight, and any other costs directly attributable to acquisition. As of December 31, 2025, the Company had no inventory on hand because all robotic units classified as inventory at December 31, 2024 had been deployed under customer subscription contracts during the year and derecognized at contract commencement.
9
MBody AI Corp, Inc.
Notes to Financial Statements
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Property and Equipment
Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives, generally three to five years, in accordance with ASC 360. The Company capitalizes purchases greater than $2,500 and expenses lower-cost items as incurred. Routine repairs and maintenance are charged to operations as incurred. The cost and related accumulated depreciation of assets sold or retired are removed from the accounts and any resulting gain or loss is reflected in operations. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, in accordance with ASC 360. The capitalization threshold and useful-life ranges are consistent with the policy disclosed in the audited financial statements for the six months ended June 30, 2025.
Customer Subscription Contracts
The Company deploys robotic equipment to customers under multi-year customer subscription contracts. At inception of each contract the Company assesses classification on a contract-by-contract basis in accordance with U.S. GAAP, applying the criteria for classification as a sales-type, direct financing, or operating subscription contracts. Subsequent interest income is recognized using the effective interest method to produce a constant periodic rate of return on the remaining net investment, in accordance with ASC 842.
Allocation of consideration in the contract. Under U.S. GAAP, the Company allocates the consideration in each contract between the subscription contract component(s) and any non-subscription contract component(s) on a relative standalone selling price basis in accordance with the revenue standard.
FY2025 conclusion on bundled contracts. The customer agreements entered into during the year ended December 31, 2025 bundle access to robotic equipment with software, AI analytics, monitoring, and deployment activities into a single monthly subscription payment. Management has concluded that the software, AI, and monitoring elements are not separately identifiable from the underlying equipment contract under the revenue standard (highly interdependent and highly interrelated, with the entity providing a significant integration service), and that deployment activities are performed to fulfill the contract and do not transfer a separate good or service to the lessee under ASC 842. Accordingly, no separate non-subscription contract components were identified for the FY2025 contracts, and the entire consideration in each contract is treated as subscription contract consideration under ASC 842. Consumables were not bundled into the FY2025 contracts.
Revenue Recognition
The Company recognizes revenue in accordance with U.S. GAAP for revenue from contracts with customers, for revenue arising from the sale of products and provision of services that are within the scope of the revenue standard. Revenue from customer subscription contracts is recognized in accordance with ASC 842 as described above and is presented separately on the statements of operations.
Cost of Revenue
Cost of revenue includes the carrying amount of robotic equipment derecognized at contract commencement, the cost of purchased robotic hardware, freight, installation, direct labor related to the fulfillment of customer contracts, third-party warranty and installation costs, and other directly attributable costs. The cost of equipment associated with sales-type contracts is recognized in cost of revenue concurrently with recognition of selling profit at contract commencement.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with U.S. GAAP for stock compensation. Awards granted to employees and non-employees in exchange for services are measured at the grant-date fair value of the equity instruments issued. Compensation expense is recognized over the requisite service period (or, for non-employees, over the period during which goods are transferred or services are rendered).
10
MBody AI Corp, Inc.
Notes to Financial Statements
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Taxes
The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. A valuation allowance is recorded against deferred tax assets to the extent that, based on the weight of available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized, in accordance with ASC 740.
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The Company evaluates uncertain tax positions in accordance with ASC 740, recognizing tax positions only when they are more likely than not to be sustained on examination by the relevant taxing authorities.
Fair Value of Financial Instruments
The Company follows the fair value measurement standard for fair-value measurement and disclosure. The carrying amounts of cash and cash equivalents, accounts payable, accrued expenses, and loans from shareholders and related parties approximate fair value due to their short-term nature or because they bear market rates of interest. The Company’s net investment in sales-type contracts is measured at amortized cost using the effective interest method; the carrying amount approximates fair value because the rates implicit in the contracts were established at contract commencement based on then-prevailing market conditions.
Concentrations of Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash on deposit and net investment in sales-type contracts. The Company places its cash with high-credit-quality financial institutions; cash balances at times exceed federally insured limits but management does not believe the Company is exposed to significant credit risk on those balances.
With respect to its customer subscription portfolio, the Company is exposed to the credit risk of its lessees. The Company’s customers are primarily large-scale hospitality groups.
3. REVENUE RECOGNITION
Revenue from within the scope of U.S. GAAP for revenue from contracts with customers, is recognized when the Company transfers control of promised goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company applies the five-step model in the revenue standard: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations on a relative standalone selling price basis; and (5) recognize revenue when (or as) the Company satisfies each performance obligation. Revenue from customer subscription contracts is recognized and is presented separately on the statements of operations.
Revenue Streams and Performance Obligations
The Company’s revenue streams comprise the following categories, each corresponding to one or more distinct performance obligations under the revenue standard, plus legacy customer subscription contracts:
| ● | AI Platform Subscription Revenue — Recurring monthly or annual fees that provide customers access to MBody AI’s proprietary cloud platform, including fleet management, task scheduling, AI analytics dashboards, and model updates. Revenue is recognized ratably over the subscription term as the customer simultaneously receives and consumes the benefits of platform access . |
| ● | AI-Enabled Services Revenue — Includes integration services, customization of AI models, data insights, and advanced analytics modules. Revenue is recognized either over time, for ongoing service subscriptions where the customer simultaneously receives and consumes benefits, or at a point in time, for project-based integrations where control transfers upon completion, depending on the specific contract terms. |
11
MBody AI Corp, Inc.
Notes to Financial Statements
3. REVENUE RECOGNITION (continued)
| ● | Deployment and Support Revenue — Covers installation, on-site setup, calibration, and initial operator training for customers deploying new robotic systems. Revenue is recognized at the point in time when the installation and training are completed and control of the deployed system transfers to the customer. |
| ● | Maintenance and Warranty Revenue — Represents the portion of contractual consideration allocated to extended maintenance, service, and warranty obligations over the 36-month term of customer agreements. Revenue is recognized over time, generally on a straight-line basis, as the Company provides these services throughout the contract period. |
| ● | Hardware Enablement Revenue — Arises from the delivery of robotic equipment sourced from third-party vendors that serve as the physical platform for MBody AI’s software. Revenue is recognized at a point in time, typically upon delivery of the hardware to the customer location, when control passes and the customer assumes risk of loss. |
| ● | Legacy Subscription Contract Revenue — Beginning in 2025, the Company entered into multi-year customer subscription contracts (containing sales-type contract components) covering robotic equipment placed at customer sites. These contracts pre-date and run alongside the new SaaS framework. Selling profit is recognized at contract commencement and interest income is recognized over the contract term using the effective interest method. |
Transition from Hardware Subscription to SaaS Model
As described in Note 1, the Company is transitioning from a hardware-centric leasing model to a software-as-a-service and AI-platform subscription model. In 2025, the Company’s revenues reflected a mix of legacy customer subscription contracts and new SaaS and AI-service contracts, with an increasing proportion of recurring software revenue expected in future periods. Legacy contracts entered into during 2025 are accounted for as sales-type contract components, as discussed in Note 4.
Transaction Price and Variable Consideration
The transaction price for contracts with customers includes fixed consideration as specified in the contract. The Company’s contracts do not generally include significant variable consideration, financing components, non-cash consideration, or consideration payable to the customer.
Contract Balances
Contract assets and contract liabilities arise when the timing of revenue recognition differs from the timing of invoicing.
Practical Expedients
The Company applies the practical expedient in the revenue standard and does not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less or for contracts where revenue is recognized in the amount the Company has the right to invoice.
12
MBody AI Corp, Inc.
Notes to Financial Statements
4. CUSTOMER SUBSCRIPTION CONTRACTS
The Company is a deployer of robotic equipment under multi-year customer subscription contracts. Each customer subscription contract grants the customer the right to use a specified robotic unit for a stated term, generally 36 months, in exchange for monthly fixed contract payments. At inception of each contract the Company evaluates the contract against the lessor classification criteria to determine classification. As of December 31, 2025 the Company had multiple customer subscription contracts outstanding, all of which were classified as sales-type contracts.
The Company evaluated each customer subscription contract against the lease classification criteria under ASC 842-10-25-2. Management concluded that the arrangements qualified as sales-type contracts primarily because the present value of the contractual payments equaled or exceeded substantially all of the fair value of the underlying robotic equipment at contract commencement. The Company determined that the criterion in ASC 842-10-25-2(d) was met for all customer subscription contracts outstanding at December 31, 2025.
Components of Net Investment in Customer Subscription Contracts
The Company presents net investment in sales-type contracts on the face of the balance sheets net of unearned finance income, bifurcated between current and non-current portions. The components of the net investment in sales-type contracts at December 31, 2025 and 2024 were as follows:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Net Investment in Customer Subscription Contracts — gross undiscounted future minimum payments | $ | 2,308,228 | $ | - | ||||
| Unguaranteed residual asset | - | - | ||||||
| Less: unearned finance income | (223,053 | ) | - | |||||
| Net investment in sales-type contracts | $ | 2,085,175 | $ | - | ||||
| Of which, current portion | $ | 824,841 | $ | - | ||||
| Of which, non-current portion | $ | 1,260,334 | $ | - | ||||
Unearned finance income represents the difference between the undiscounted future contractual payments and the net investment in the sales-type contracts. The Company presents net investment in customer subscription contracts net of unearned finance income on the balance sheets in accordance with ASC 842 lessor accounting guidance. Accordingly, unearned finance income is not separately presented as a liability.
13
MBody AI Corp, Inc.
Notes to Financial Statements
4. CUSTOMER SUBSCRIPTION CONTRACTS (Continued)
Maturities of Net Investments in Customer Subscription Contracts
Maturities of the Company’s undiscounted future minimum contract payments to be received under the sales-type subscription contracts as of December 31, 2025, with reconciliation to the net investment, are as follows:
| Year Ending December 31, | Amount | |||
| 2026 | $ | 956,071 | ||
| 2027 | 824,079 | |||
| 2028 | 496,579 | |||
| 2029 | 18,000 | |||
| 2030 | 13,500 | |||
| Thereafter | - | |||
| Total undiscounted future minimum contract payments | $ | 2,308,228 | ||
| Less: unearned finance income | (223,053 | ) | ||
| Net investment in sales-type contracts | $ | 2,085,175 | ||
Components of Subscription Contract Income
Under sales-type lease accounting, the Company recognizes selling profit at contract commencement because control of the underlying robotic equipment is considered transferred to the customer at lease commencement in accordance with ASC 842 lessor accounting guidance. The selling profit recognized represents the excess of the net investment in the sales-type contract over the carrying amount of the underlying robotic equipment derecognized at commencement. Subsequent cash receipts are allocated between reduction of the net investment and recognition of finance income using the effective-interest method over the contract term.
Subscription Contract income recognized for the year ended December 31, 2025 and the period from October 7, 2024 to December 31, 2024 consisted of the following:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Selling profit recognized at contract commencement (the lessor accounting standard) | $ | 1,163,727 | $ | - | ||||
| Interest income on net investment in sales-type contracts | 65,542 | - | ||||||
| Total contract income | $ | 1,229,269 | $ | - | ||||
Significant Judgments and Assumptions
Significant judgments are required in measuring the net investment in customer subscription contracts and determining sales-type classification. The Company measures the net investment in each contract as the present value of future contractual payments using the rate implicit in the contract when readily determinable. The implicit rate is derived based on the fair value of the underlying robotic equipment, estimated residual values, expected contractual cash flows, and the carrying value of the underlying equipment at contract commencement.
Where the implicit rate is not readily determinable, the Company utilizes an estimated incremental borrowing rate based on market borrowing rates for similar financing arrangements. The weighted-average discount rate utilized for contracts outstanding at December 31, 2025 approximated 8.0% per annum.
The Company does not assume significant unguaranteed residual values at contract commencement. Management also evaluates the estimated economic life of the underlying robotic equipment, expected customer usage patterns, and collectability assumptions in determining the appropriate accounting treatment and measurement of the net investment in customer subscription contracts.
14
MBody AI Corp, Inc.
Notes to Financial Statements
5. INVENTORIES
At December 31, 2024, inventory of $75,934 consisted of robotic units held for deployment under future customer subscription contracts. During the year ended December 31, 2025, the underlying robotic equipment was derecognized upon commencement of sales-type customer subscription contracts and included in the determination of net investment in sales-type customer subscription contracts. Accordingly, the Company had no inventory on hand at December 31, 2025.
6. PROPERTY AND EQUIPMENT
Property and equipment, net consisted of the following at December 31, 2025 and 2024:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Robotic equipment, at cost | $ | 599,582 | $ | - | ||||
| Vehicles, at cost | 15,500 | - | ||||||
| Total property and equipment, gross | $ | 615,082 | $ | - | ||||
| Less: accumulated depreciation | (69,097 | ) | $ | - | ||||
| Property and equipment, net | $ | 545,985 | $ | - | ||||
Depreciation expense recognized for the year ended December 31, 2025 was $69,097. Depreciation expense for the period from October 7, 2024 to December 31, 2024 was $0.
The Company has no right-of-use assets recorded as a lessee. The Company’s office and corporate accommodations are leased on a month-to-month basis and qualify for the short-term lease practical expedient (the short-term lease practical expedient) and are accordingly expensed as incurred. No impairment indicators were identified at December 31, 2025; no impairment loss has been recorded.
15
MBody AI Corp, Inc.
Notes to Financial Statements
7. LOANS PAYABLE
Loans payable consisted of the following at December 31, 2025 and 2024:
Loans from Shareholders — Non-Interest-Bearing
At December 31, 2025 the Company had $16,000 of non-interest-bearing loans outstanding from two of its shareholders (Seven North Capital $5,000 and Anup Sharma $11,000), and $400,000 of interest-bearing loan principal outstanding from Apollo Technology Capital (December 31, 2024: $183,202). All shareholder loans are due upon demand and bear no interest, consistent with the disclosure in the audited financial statements for the period ended June 30, 2025. The lenders are Seven North Capital and Anup Sharma, each of whom is a shareholder of the Company.
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Seven North Capital | $ | 5,000 | $ | 182,202 | ||||
| Anup Sharma | 11,000 | 1,000 | ||||||
| Total non-interest-bearing shareholder loans | $ | 16,000 | $ | 183,202 | ||||
Loan from Apollo
On September 10, 2025 the Company received an advance of $400,000 from Apollo Technology Capital pursuant to a written promissory grid note. The loan bears interest at 10% per annum and is classified as current, as the note matured on December 9, 2025 pursuant to the terms of the promissory note. Accrued interest of $12,384 was recognized for the year ended December 31, 2025 and is included in accounts payable and accrued expenses. Apollo is a related party of the Company under the related party disclosures. The loan and the related accrued interest are accordingly also disclosed in Note 11 (Related Party Transactions).
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Loan from Apollo Technology Capitalprincipal | $ | 400,000 | $ | - | ||||
| Accrued interest payable | 12,384 | - | ||||||
| Total Apollo obligation | $ | 412,384 | $ | - | ||||
16
MBody AI Corp, Inc.
Notes to Financial Statements
8. INCOME TAXES
The Company is a Nevada C corporation subject to U.S. federal income tax. The State of Nevada does not impose a corporate income tax. Nevada imposes a Commerce Tax under Nevada Revised Statutes Chapter 363C on Nevada gross revenue exceeding $4,000,000; the Company’s Nevada gross revenue did not exceed this threshold for the year ended December 31, 2025. The Company has evaluated nexus in jurisdictions outside Nevada based on the location of its customers, employees, and physical assets, and has concluded that no other state or local jurisdiction imposes income tax on the Company for the year ended December 31, 2025 above any applicable de minimis threshold.
Components of Income (Loss) Before Income Taxes
All income before income taxes for the periods presented was generated in the United States. There were no foreign components.
Components of Income Tax Provision
The components of the income tax provision (benefit) for the year ended December 31, 2025 and the period from October 7, 2024 to December 31, 2024 were as follows:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Current: | ||||||||
| Federal | $ | - | $ | 290 | ||||
| State (Nevada – no corporate income tax) | - | - | ||||||
| Total current tax | $ | - | $ | 290 | ||||
| Deferred: | ||||||||
| Federal — origination of net deferred tax liability | $ | 43,626 | $ | - | ||||
| State | - | - | ||||||
| Total deferred tax | $ | 43,626 | $ | - | ||||
| Total income tax provision | $ | 43,626 | $ | 290 | ||||
Effective Tax Rate Reconciliation
A reconciliation of the U.S. statutory federal income tax rate to the Company’s effective tax rate for the year ended December 31, 2025 is as follows:
| Year Ended December 31, 2025 | Amount | Rate | ||||||
| Federal tax at statutory rate (IRC §11(b)) | $ | 115,810 | 21.00 | % | ||||
| Effect of 40% bonus depreciation election (Notice 2026-11) | (54,562 | ) | (9.89 | )% | ||||
| Effect of operating-a tax characterization on customer subscriptions | (17,622 | ) | (3.20 | )% | ||||
| State income taxes (Nevada — no corporate income tax) | - | 0.00 | % | |||||
| Permanent differences | - | 0.00 | % | |||||
| Total income tax provision (deferred only) | $ | 43,626 | 7.91 | % | ||||
The effective tax rate reconciliation reconciles the federal statutory rate of 21% applied to pre-tax book income of $551,477 ($115,810) to the recorded income tax provision of $43,626 (effective rate 7.91%). The reconciling differences of $72,184 arise principally from the 40% bonus depreciation election under IRC §168(k)(6)(A) per Notice 2026-11 ($54,562) and from the operating-lease tax characterization of customer subscription contracts ($17,622), each of which generates current-period taxable timing differences (deferred tax liabilities) but does not affect current-period current tax payable.
17
MBody AI Corp, Inc.
Notes to Financial Statements
8. INCOME TAXES (continued)
Components of Net Deferred Tax Assets and Liabilities
Significant components of the Company’s deferred tax assets and liabilities at December 31, 2025 were as follows:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Deferred tax assets: | ||||||||
| Unearned finance income (timing difference) | $ | 44,586 | $ | - | ||||
| Accrued interest (cash-basis tax treatment) | 2,601 | - | ||||||
| Net operating loss carryforward — $1,317,110 × 21% | 276,593 | - | ||||||
| Total deferred tax assets, gross | 323,780 | - | ||||||
| Less: valuation allowance | - | - | ||||||
| Net deferred tax assets | $ | 323,780 | $ | - | ||||
| Deferred tax liabilities: | ||||||||
| Net investment in subscription contracts vs. underlying equipment tax NBV | (315,246 | ) | - | |||||
| Property and equipment (book SL vs. tax MACRS) | (52,160 | ) | - | |||||
| Total deferred tax liabilities | $ | (367,406 | ) | $ | - | |||
| Net deferred tax liability | $ | (43,626 | ) | $ | - | |||
Valuation Allowance Assessment
In assessing whether a valuation allowance is required against deferred tax assets, the Company considers the four sources of taxable income identified by U.S. GAAP for income taxes: (1) future reversals of existing taxable temporary differences; (2) future taxable income exclusive of reversing temporary differences and carryforwards; (3) taxable income in prior carryback years (limited applicability post-Tax Cuts and Jobs Act); and (4) tax planning strategies. The Company weighs all available positive and negative evidence to determine whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Net Operating Loss Carry forwards
The Company has approximately $1,317,110 of federal net operating loss carryforwards generated in the year ended December 31, 2025 available to offset future taxable income, subject to the 80% limitation under Section 172(a)(2) for net operating losses arising in tax years beginning after December 31, 2017. Such carryforwards have an indefinite life and are not subject to expiration.
The proposed merger with Check-Cap Ltd. will trigger an ownership change as defined in Internal Revenue Code Section 382, which will impose an annual limitation on the Company’s ability to utilize its pre-change net operating loss carryforwards. The amount of the Section 382 limitation will be determined on the closing date of the merger based on the value of the Company immediately before the ownership change multiplied by the long-term tax-exempt rate then in effect.
18
MBody AI Corp, Inc.
Notes to Financial Statements
9. STOCKHOLDERS’ EQUITY
Authorized Shares
The Company’s Articles of Incorporation, as filed with the Nevada Secretary of State on October 7, 2024 (under the Company’s prior name Rline AI Inc.), authorize the issuance of 200,000,000 shares of common stock at par value of $0.00001 per share. The Company has not authorized any shares of preferred stock.
Issued and Outstanding
Common stock activity for the year ended December 31, 2025 and the period from October 7, 2024 to December 31, 2024 is summarized below:
| Description | Shares | Cash Consideration | ||||||
| Shares issued at formation (October 7, 2024) | 35,900,000 | $ | 359 | |||||
| Shares issued January 1, 2025 to December 31, 2025 | 117,466,667 | $ | 2,079,086 | |||||
| Shares outstanding at December 31, 2025 | 153,366,667 | |||||||
The Company has no stock options, warrants, restricted stock units, convertible notes, or other potentially dilutive securities outstanding at December 31, 2025 or December 31, 2024. The 2024 audited financial statements reported no such instruments.
10. EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by giving effect to all potentially dilutive common stock equivalents outstanding for the period. As the Company has no outstanding stock options, warrants, convertible securities, or other potentially dilutive equity instruments, basic and diluted earnings per share are equivalent for the periods presented.
| ● | Net income for EPS computation: $507,851 (2025); $1,089 (2024 stub period). |
| ● | Weighted-average common shares outstanding (basic and diluted): 150,346,911 (2025); 35,900,000 (2024 stub period). |
| ● | Earnings per share — basic and diluted: $0.0034 (2025); $0.0000 (2024 stub period). |
11. RELATED PARTY TRANSACTIONS
The Company has identified the following related party transactions and balances during the periods presented, in accordance with U.S. GAAP for related party disclosures.
Loans from Shareholders
Two shareholders, Seven North Capital and Anup Sharma, have advanced funds to the Company. The aggregate balance outstanding at December 31, 2025 was $16,000 (December 31, 2024: $183,202). All shareholder loans are due upon demand and bear no interest, consistent with the audited financial statements for the period ended June 30, 2025. Because each lender is a shareholder of the Company, the loans are disclosed under U.S. GAAP for related party disclosures.
Loan from Apollo
At December 31, 2025 the Company had a $400,000 loan outstanding from Apollo, with $12,384 of accrued interest at a stated rate of 10% per annum. Apollo is a related party of the Company under the related party disclosures standard. The loan is also disclosed in Note 7 (Loans Payable).
19
MBody AI Corp, Inc.
Notes to Financial Statements
12. COMMITMENTS AND CONTINGENCIES
Corporate Leases
The Company leases office space, storage and staff accommodations on a month-to-month basis at a rate of less than $5,000 per month. Because the lease term does not exceed 12 months, the Company has elected the short-term lease practical expedient and recognizes the lease payments as expense on a straight-line basis without recognition of a right-of-use asset or lease liability. This treatment is consistent with the disclosure in the financial statements for the six months ended June 30, 2025.
Litigation
From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. As of the date of issuance of these financial statements, management is not aware of any pending or threatened litigation that would have a material adverse effect on the Company’s financial position, results of operations or cash flows. This is consistent with the disclosure in the financial statements for the six months ended June 30, 2025.
Based on inquiry of management and the Company’s general counsel, there are no pending or threatened legal proceedings against the Company at December 31, 2025 that, individually or in the aggregate, would require accrual or disclosure under U.S. GAAP for contingencies.
13. GOING CONCERN
Management has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these financial statements are available to be issued.
In conducting this evaluation, management considered the Company’s cash position at year-end in conjunction with net cash used in operating activities for the year. Management also considered the Company’s historical reliance on equity issuances and shareholder loans for working capital.
Management’s plans to address operating cash needs over the look-forward period include (i) closing of the proposed merger with Check-Cap Ltd.; (ii) continued availability of demand-due shareholder loans consistent with the Company’s historical practice; and (iii) active monitoring of operating cash flow with the ability to defer non-essential expenditures if required.
Based on the foregoing, management has concluded that the conditions and events described above, considered in the aggregate, do not raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these financial statements are available to be issued. If the proposed merger does not close within the expected timeframe, management’s evaluation of going concern would be reassessed at that time and additional plans developed and disclosed as appropriate.
14. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date the financial statements were available to be issued, in accordance with U.S. GAAP for subsequent events.
Pending Merger with Check-Cap Ltd.
On September 12, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Check-Cap Ltd. (“Check-Cap”), a publicly traded company organized under the laws of Israel and listed on the Nasdaq Capital Market under ticker symbol “MBAI”. Under the Merger Agreement, the Company will become a wholly owned subsidiary of Check-Cap, with the existing stockholders of the Company collectively owning approximately 10% of the combined company’s outstanding shares immediately after the merger. For accounting purposes, MBody AI Corp. is the accounting acquirer. Check-Cap shareholders approved the Merger Agreement in November 2025.
Consummation of the merger is subject to customary closing conditions, including: (i) approval by the shareholders of Check-Cap; (ii) effectiveness of a Form F-4 registration statement to be filed with the U.S. Securities and Exchange Commission; (iii) approval of the Tel Aviv Stock Exchange and the Nasdaq Stock Market for the listing of the post-merger combined company’s shares; (iv) obtaining required regulatory approvals; and (v) other customary conditions.
The execution of the Merger Agreement on September 12, 2025 and the approval of the Merger Agreement by Check-Cap shareholders in November 2025 occurred within the year ended December 31, 2025 and are accordingly described in Note 1 and in this Note 14 for completeness; neither event constitutes a subsequent event under U.S. GAAP for subsequent events. As of the date these financial statements were available to be issued, the merger had not closed, and consummation remains subject to the closing conditions described above; closing is expected to occur in the first half of 2026, although there can be no assurance that the merger will be consummated. Accordingly, these financial statements are presented on a standalone basis and have not been adjusted to reflect the merger or the post-close combined entity. The merger will be reflected in the Company’s financial statements in the period in which it is consummated; if the merger is not consummated, no merger-related adjustments will be required.
20
Exhibit 99.2
PRO FORMA COMBINED UNAUDITED BALANCE SHEETS
(U.S. dollars in thousands, except share and per share data)
| MBody AI | Check-Cap | Pro forma | ||||||||||
| Corp. | Ltd. | Combined | ||||||||||
| December 31, | December 31, | December 31, | ||||||||||
| 2025 | 2025 | 2025 | ||||||||||
| Audited | Audited | Unaudited | ||||||||||
| Assets | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | 799 | 2 | 801 | |||||||||
| Short-term bank deposits | – | 217 | 217 | |||||||||
| Net investment in customer subscription contracts – current | 825 | – | 825 | |||||||||
| Loan to related parties — Check-Cap Ltd. (eliminated as intercompany – see Note 5) | 16 | – | – | |||||||||
| Total current assets | 1,640 | 219 | 1,843 | |||||||||
| Non-current assets | ||||||||||||
| Net investment in customer subscription contracts — non-current | 1,260 | – | 1,260 | |||||||||
| Property and equipment, net | 546 | – | 546 | |||||||||
| Investments | – | 6,525 | 6,525 | |||||||||
| Intangible asset, net | – | 726 | 726 | |||||||||
| Right-of-use assets – operating lease | – | 16 | 16 | |||||||||
| Total non-current assets | 1,806 | 7,267 | 9,073 | |||||||||
| Total assets | 3,446 | 7,486 | 10,916 | |||||||||
| Liabilities and stockholders’ equity | ||||||||||||
| Current liabilities | ||||||||||||
| Accounts Payable | 139 | 790 | 929 | |||||||||
| Other accounts payable and accruals (net of $16 intercompany — see Note 5) | – | 2,197 | 2,181 | |||||||||
| Accrued expenses | 260 | – | 260 | |||||||||
| Employees and payroll accruals | – | 406 | 406 | |||||||||
| Other accrued liabilities | – | 640 | 640 | |||||||||
| Operating lease liabilities – current | – | 16 | 16 | |||||||||
| Loans from shareholders / related parties | 416 | – | 416 | |||||||||
| Total current liabilities | 815 | 4,049 | 4,848 | |||||||||
| Non-current liabilities | ||||||||||||
| Net deferred tax liability | 44 | – | 44 | |||||||||
| Operating lease liabilities – non-current | – | – | – | |||||||||
| Total non-current liabilities | 44 | – | 44 | |||||||||
| Total liabilities | 859 | 4,049 | 4,892 | |||||||||
| Stockholders’ equity | ||||||||||||
| Share capital (reflects Check-Cap legal capital structure — see Note 5) | 2 | 83,918 | 83,918 | |||||||||
| Additional paid-in capital (includes $2 reclass — see Note 5) | 2,078 | 85,389 | 87,469 | |||||||||
| Retained earnings (accumulated deficit) | 509 | (165,870 | ) | (165,361 | ) | |||||||
| Effects of rounding | (2 | ) | – | (2 | ) | |||||||
| Total stockholders’ equity | 2,587 | 3,437 | 6,024 | |||||||||
| Total liabilities and equity | 3,446 | 7,486 | 10,916 | |||||||||
1
PRO FORMA COMBINED UNAUDITED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
| MBody AI Corp. | Check-Cap Ltd. | Pro forma Combined | ||||||||||
| For the year ended December 31, 2025 | ||||||||||||
| Revenues: | ||||||||||||
| Customer subscription contract revenue | $ | 2,210 | $ | – | $ | 2,210 | ||||||
| Subscription interest income | 66 | – | 66 | |||||||||
| Product sales | 74 | – | 74 | |||||||||
| Services revenue | 51 | – | 51 | |||||||||
| Total revenues | 2,401 | – | 2,401 | |||||||||
| Cost of revenues | 1,046 | – | 1,046 | |||||||||
| Gross profit | 1,355 | – | 1,355 | |||||||||
| Operating expenses: | ||||||||||||
| Selling, general and administrative expenses | 721 | 2,373 | 3,094 | |||||||||
| Depreciation | 69 | – | 69 | |||||||||
| Research and development expenses, net | – | – | – | |||||||||
| Total operating expenses | 790 | 2,373 | 3,163 | |||||||||
| Operating income (loss) | 565 | (2,373 | ) | (1,808 | ) | |||||||
| Other income (expense): | ||||||||||||
| Income on debt extinguishment and conversion | – | 6,525 | 6,525 | |||||||||
| Finance income (expense), net | – | (12 | ) | (12 | ) | |||||||
| Interest expense | (12 | ) | – | (12 | ) | |||||||
| Total other income (expense), net | (12 | ) | 6,513 | 6,501 | ||||||||
| Income before income tax | $ | 553 | $ | 4,140 | $ | 4,693 | ||||||
| Income tax provision | (44 | ) | – | (44 | ) | |||||||
| Net Income (Loss) | $ | 509 | $ | 4,140 | $ | 4,649 | ||||||
| Income (loss) per share: | ||||||||||||
| Net income (loss) per ordinary share - basic and diluted | $ | 0.0034 | $ | 0.66 | $ | 0.07 | ||||||
| Weighted average number of ordinary shares outstanding - basic and diluted | 150,346,911 | 6,232,226 | 70,205,020 | |||||||||
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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS (U.S. dollars in thousands, except share and per share data)
NOTE 1. DESCRIPTION OF THE BUSINESS COMBINATION
MBody AI Corp. (“MBody AI”), a Nevada C-corporation incorporated on October 7, 2024, and Check-Cap Ltd. (“Check-Cap”), an Israeli company whose ordinary shares are listed on the NASDAQ Capital Market, entered into a Business Combination Agreement and Plan of Merger pursuant to which, upon the legal closing of the merger, MBody AI will be merged with and into a wholly-owned subsidiary of Check-Cap (CC Merger Sub Inc., a Nevada corporation incorporated on September 9, 2025), with MBody AI surviving as a wholly-owned subsidiary of Check-Cap (the “Merger”).
Approximately 98% of Check-Cap shareholder votes cast at the special general meeting held in November 2025 were in favor of the Merger. Effective December 2, 2025, Check-Cap’s NASDAQ ticker was changed from “CHEK” to “MBAI”. The actual closing date of the Merger has not yet occurred but is expected to take place in the first half of 2026; for purposes of this pro-forma presentation, see Note 3 regarding the assumed transaction dates.
Pursuant to the agreed share-exchange ratio, MBody AI’s pre-merger equity holders own approximately 90% of the post-merger combined entity, and Check-Cap’s pre-merger equity holders own approximately 10%.
NOTE 2. BASIS OF PRESENTATION
These unaudited pro-forma combined financial statements have been prepared in accordance with Article 11 of Regulation S-X, as amended by SEC Final Rule 33-10786 (effective January 1, 2021). The pro-forma combined financial information reflects the historical financial statements of MBody AI and Check-Cap, adjusted to give effect to the Merger and certain related transactions described herein.
These statements are combined, not consolidated. The two companies remain distinct legal entities; the Merger has not yet legally closed, and there is no parent-subsidiary relationship at the date of these statements. Combined presentation is used for investor information purposes only — to illustrate what the combined entity’s financial position and results of operations would have approximated had the Merger occurred on January 1, 2025. ARB No. 51 / ASC 810-10 consolidation provisions do not apply at this point.
In accordance with Article 11, only Transaction Accounting Adjustments are presented (and these are described qualitatively in Note 5 rather than via separate adjustment columns due to immateriality). No Management’s Adjustments (as defined in Rule 11-02(a)(7)) — such as projected synergies — are presented.
Both companies report under U.S. generally accepted accounting principles (“U.S. GAAP”) and use the U.S. dollar as their functional and presentation currency. No IFRS-to-GAAP conversion or currency translation adjustments are required.
All amounts are presented in U.S. dollars in thousands, except share and per-share data. MBody AI’s source ledger is maintained in full U.S. dollars; line items have been rounded to the nearest thousand individually. Sums of displayed line items may not foot to displayed totals due to rounding. Check-Cap’s source figures are presented as reported in its Form 20-F (in $ thousands).
No comparative pro-forma information for FY2024 or FY2023 has been prepared.
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NOTE 3. ASSUMED TRANSACTION DATES
The unaudited pro-forma combined balance sheet at December 31, 2025 gives effect to the Merger as if it had occurred on December 31, 2025. The unaudited pro-forma combined statement of operations for the year ended December 31, 2025 gives effect to the Merger as if it had occurred on January 1, 2025. The actual legal closing of the Merger has not yet occurred.
NOTE 4. ACCOUNTING TREATMENT: REVERSE RECAPITALIZATION
The Merger has been accounted for as a reverse recapitalization rather than as a business combination under ASC 805, Business Combinations. This determination is based on management’s conclusion. At closing, Check-Cap had no significant operating activities, no employees engaged in operations, no revenue-generating processes, and no organized workforce. The Apollo investment securities and Ghost Kitchens intangible asset recognized in 2025 represent passive financial and intangible holdings, not an integrated set of activities and assets capable of producing outputs.
Under reverse recapitalization accounting: (i) the historical financial statements of the combined entity going forward will be those of the accounting acquirer, MBody AI; (ii) the legal capital structure (par value, share count, authorized shares) of the combined entity is that of the legal acquirer, Check-Cap; (iii) Check-Cap’s net assets at the assumed transaction date are recorded at their pre-merger carrying values, with no fair-value step-up and no recognition of goodwill or bargain purchase gain; and (iv) any difference between the par value of shares issued and the fair value of net assets received is reflected in additional paid-in capital.
NOTE 5. COMBINATION ADJUSTMENTS
These pro-forma combined statements are combined rather than consolidated; intercompany adjustments are not presented in separate adjustment columns due to immateriality (each less than 0.2% of pro-forma total assets or equity). The following adjustments are reflected in the pro-forma combined column and disclosed here for transparency:
(a) Intercompany loan elimination
MBody AI’s balance sheet at December 31, 2025 includes a ‘Loan to related parties — Check-Cap Ltd.’ of $16. Check-Cap’s December 31, 2025 balance sheet does not separately disclose a corresponding payable; this loan is included within Check-Cap’s ‘Other accounts payable and accruals — Other’ of $2,197. The pro-forma combined column reflects the elimination of this intercompany balance: MBody AI’s $16 receivable is shown as $0 in the pro-forma combined column, and Check-Cap’s $2,197 ‘Other accounts payable and accruals’ is shown net of the $16 intercompany payable as $2,181. No income statement impact arises — no intercompany interest income or expense was recognized in either historical statement of operations for FY2025.
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(b) Share capital reclassification
MBody AI’s pre-merger share capital of $2 (par value $0.00001) is reclassified into additional paid-in capital under Check-Cap’s legal capital structure (NIS 48 par-value ordinary shares). Pro-forma combined share capital reflects only Check-Cap’s $83,918 historical share capital. Pro-forma combined additional paid-in capital reflects the sum of MBody AI’s APIC ($2,078), Check-Cap’s APIC ($85,389), and the $2 reclassification = $87,469.
(c) For purposes of the pro-forma basic and diluted earnings per share calculation, the weighted-average shares outstanding of 70,205,020 reflect Check-Cap’s 7,020,502 ordinary shares using the agreed share-exchange ratio of 10%.
(d) Accumulated deficit treatment
Check-Cap’s historical accumulated deficit of $(165,870) is carried forward and combined with MBody AI’s historical retained earnings of $509, resulting in a pro-forma combined accumulated deficit of $(165,361). Management has elected to carry forward Check-Cap’s accumulated deficit rather than absorb it into additional paid-in capital. SAB Topic 4.C supports fact-specific treatment; absorption into APIC was rejected because Check-Cap’s accumulated deficit substantially exceeds combined APIC, which would have resulted in a negative APIC of $(78,401), a presentationally inappropriate outcome.
(e) No fair-value step-up; no goodwill
Consistent with reverse recapitalization treatment, Check-Cap’s net assets are recorded at their pre-merger carrying values. No fair-value step-up is applied. No goodwill or bargain purchase gain is recognized.
(f) Effects of rounding
MBody AI’s source ledger is maintained in full U.S. dollars; line items have been rounded individually to the nearest thousand for presentation. The net rounding adjustment of $(2) to balance MBody AI’s column is presented as a separate equity line for transparency.
(g) Transaction costs
Direct costs of issuing equity in connection with the Merger — including legal fees, accounting and professional fees, SEC and FINRA filing fees, NASDAQ listing fees, printer fees, and other miscellaneous costs have not been capitalized since the transaction is not yet closed. Had these estimated costs been capitalized, the pro-forma combined column would reflect an estimated adjustment of $(163) to cash and a corresponding $(163) to additional paid-in capital. The estimate breaks down as follows: SEC registration fee $1; FINRA filing fee $2; printer fees $10; legal fees $100; accounting and professional fees $30; miscellaneous $20; total $163. Final amounts will be reflected in the period in which the merger is consummated.
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NOTE 6. REFERENCE TO STANDALONE FINANCIAL STATEMENTS
These pro-forma combined statements should be read in conjunction with the following standalone financial statements:
| (a) | MBody AI Corp. — audited financial statements for the year ended December 31, 2025, including the comparative stub period from October 7, 2024 (inception) to December 31, 2024. |
| (b) | Check-Cap Ltd. — audited consolidated financial statements as of and for the year ended December 31, 2025, as filed in Check-Cap’s Form 20-F. |
Notes to those standalone statements — including but not limited to revenue recognition policies, leases (ASC 842), property, plant and equipment, related party transactions, stockholders’ equity (including share-based compensation), income taxes, and subsequent events — are incorporated herein by reference and are not duplicated in these pro-forma combined statements.
NOTE 7. MATERIAL ASSUMPTIONS AND LIMITATIONS
This unaudited pro-forma combined financial statements are presented for informational purposes only. They are not necessarily indicative of the financial position or results of operations that would have been achieved had the Merger actually occurred on the dates indicated, nor are they indicative of future financial position or results of operations of the combined entity. The pro-forma adjustments are based on currently available information and assumptions that management believes are reasonable. Final adjustments may differ materially from those reflected herein.
These statements have not been audited or reviewed by the Company’s independent registered public accounting firm.
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Exhibit 99.3
 |
200 Spectrum Center Drive, |
| Suite 300 | |
| Irvine, CA 92618 | |
| (714) 234-5980 | |
| www.BCRGCPAS.com |
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in registration statements on Form S-8 (333-203384), Form S-8 (333-226490) and Form S-8 (333-259666)) of Check-Cap Ltd. of our report dated May 12, 2026, with respect to the financial statements of MBody AI Corp for the years ended December 31, 2025 and December 31, 2024, and for the periods from October 7, 2024 (date of formation) to December 31, 2024, and ending December 31, 2025 included in this Report of a Foreign Private Issuer on Form 6-K.
We also consent to the reference to our Firm under the caption “Experts” in such Registration Statement.
Irvine, California
May 12, 2026