Business Context and Reporting Period
This Form 6-K filing by Check-Cap Ltd. (referred to as Mbody AI Ltd. in metadata) covers the period ending April 22, 2020. The filing discloses a definitive agreement entered into on April 20, 2020, for a registered direct offering of ordinary shares to institutional investors.
Key Financial Metrics and Transaction Details
- Gross Proceeds: Approximately $4,000,000.
- Shares Issued: 6,666,669 ordinary shares.
- Purchase Price: $0.60 per share.
- Warrants Issued to Investors: 6,666,669 warrants (1:1 ratio) with an exercise price of $0.80 per share, expiring 5.5 years from issuance.
- Placement Agent Warrants: 466,667 warrants (7% of aggregate shares sold) with an exercise price of $0.75 per share, expiring April 20, 2025.
- Transaction Costs: 7.0% placement fee, 1.0% management fee, $65,000 expense allowance, and $12,900 clearing fee payable to H.C. Wainwright & Co., LLC.
The filing does not provide specific revenue, profit, cash flow, margin, or debt figures for the company's operations.
Material Changes and Covenants
The primary material change is the capital raise described above. The agreement includes the following covenants:
- Lock-up Period: The Company is restricted from issuing or announcing the issuance of ordinary shares or equivalents for 45 days following the closing.
- Variable Rate Transaction Restriction: The Company cannot effect a "variable rate transaction" for 12 months following the closing.
- Registration Obligation: The Company must file a registration statement for the resale of warrant shares by May 20, 2020, and use commercially best efforts to have it declared effective within 90 days of closing.
Outlook, Risks, and Unusual Items
The offering is expected to close on or about April 22, 2020, subject to customary closing conditions. The warrants issued to investors are immediately exercisable but may be exercised on a cashless basis if no effective registration statement exists six months after issuance. The filing notes that the securities are sold pursuant to exemptions from registration requirements under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D.
Investor Verification Checklist
- Verify the actual closing date of the offering and confirmation of the $4,000,000 gross proceeds.
- Confirm the effective date of the registration statement for the resale of warrant shares (required by May 20, 2020).
- Review the impact of the 7.0% placement fee and other transaction costs on net proceeds.
- Assess the dilution impact of the 6,666,669 new shares and the associated warrants.
- Check for any subsequent filings regarding the 45-day lock-up period expiration.