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 July 24, 2020. The Company is a foreign private issuer based in Israel focused on the clinical development of its C-Scan® technology.
Key Financial Metrics and Transaction Details
The filing details a warrant exercise agreement entered into on July 23, 2020, with institutional investors. Key financial terms include:
- Gross Proceeds: Approximately $9.6 million (prior to fees and expenses).
- Shares Issued: Up to 16,054,223 ordinary shares.
- Exercise Price: Reduced to $0.60 per share for the exercised warrants (original prices ranged from $0.80 to $15.00).
- Placement Agent Fees: 7.0% cash placement fee, 1.0% management fee, $65,000 expense allowance, and $12,900 clearing fee.
- Agent Warrants: Warrants to purchase up to 1,123,796 shares (7.0% of shares placed) at an exercise price of $0.75 per share.
The filing does not provide specific revenue, profit, cash flow, margin, or debt figures for the reporting period.
Material Changes and New Securities
As part of the transaction, the Company agreed to issue new unregistered "Private Placement Warrants" to the Holders:
- Quantity: Up to 19,265,068 ordinary shares.
- Terms: Immediately exercisable, 5.5-year expiration, $0.80 exercise price.
- Registration: The Company committed to filing a registration statement for the resale of these shares by August 22, 2020, with an effectiveness target of September 21, 2020.
Outlook, Use of Proceeds, and Risks
Use of Proceeds: Net proceeds are designated to advance the clinical development of C-Scan®, including preparations for a U.S. pivotal study, and for general corporate purposes.
Risks and Contingencies:
- The Private Placement Warrants and underlying shares are sold under Section 4(a)(2) and Rule 506 exemptions and are not registered under the Securities Act of 1933.
- These securities may not be offered or sold in the U.S. except pursuant to an effective registration statement or applicable exemption.
- Warrants may be exercised on a cashless basis if no effective registration statement exists at the time of exercise.
Investor Verification Checklist
- Verify the final net proceeds after deducting the 8.0% total cash fees and other expenses.
- Confirm the filing and effectiveness date of the registration statement for the Private Placement Warrants (targeted for September 21, 2020).
- Review the dilution impact of the 16,054,223 shares issued plus the 19,265,068 shares underlying the new warrants.
- Check the status of the U.S. pivotal study for C-Scan® to assess the utilization of funds.