ISFIYA, Israel, March 6, 2020 /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 transform into colorectal cancer, today announced financial results for the fourth quarter and full year ended December 31, 2019.
2019 and Recent Highlights:
- Continued to advance the pre-submission process with FDA towards the initiation of a pivotal trial of the C-Scan System in late 2020
- In February 2020, strengthened its balance sheet through a $4.76 million private placement of ordinary shares
- In December 2019, announced positive results from the U.S. pilot study of C-Scan that was performed at the NYU Grossman School of Medicine and Mayo Clinic of Rochester
- In August 2019, announced the completion of manufacturing line transfer implementation and qualification for the C-Scan System to our manufacturing partner, GE Healthcare, a leading global medical technology and life sciences company
- In July 2019, announced positive results from the post-CE approval study of C-Scan, which further validated the importance and potential of the system.
"We ended 2019 on a high note with the successful completion of our U.S. pilot study of the C-Scan System which, pending FDA approval, sets the stage for the initiation of a U.S. pivotal trial in late 2020," said Alex Ovadia, Chief Executive Officer of Check-Cap. "There exists a significant global unmet need for a colon cancer screening and detection technology that is preparation free and non- invasive compared to the current standard of care, colonoscopy. We believe the patient-friendly C-Scan System can increase screening rates globally by eliminating the rigorous and unpleasant preparation that colonoscopy and other tests require.
"Colon cancer is a highly preventable disease, and an increase in global screening rates that we believe C-Scan can facilitate will result in earlier detection and improved long-term patient outcomes. We look forward to initiating a U.S. pivotal trial, as we work to introduce this groundbreaking technology in the important US market," Mr. Ovadia concluded.
Financial Results for the Fourth Quarter Ended December 31, 2019
Research and development expenses, net, were $2.8 million for the three months ended December 31, 2019, compared to $2.4 million for the same period in 2018. The increase is primarily due to a $0.4 million increase in salaries and related expenses and a $0.2 million increase in materials, subcontractor and consultant expenses, primarily in connection with our U.S. pilot study and regulatory expenses, offset in part by a $0.1 million decrease in share-based compensation expenses.
General and administrative expenses were $1.0 million for the three months ended December 31, 2019, compared to $1.1 million for the same period in 2018. The decrease is primarily due to a $0.2 million decrease in professional services, offset in part by a $0.1 million increase in salaries and related expenses.
Operating loss was $3.9 million for the three months ended December 31, 2019, compared to an operating loss of $3.5 million for the same period in 2018.
Financial income, net was $19,000 for the three months ended December 31, 2019, compared to $366,000 for the same period in 2018. The change is primarily as a result of a change in royalties' provision of $3,000 in 2019 compared to $295,000 in 2018 and $29,000 financial income from interest compared to $80,000 in 2018.
Net loss was $3.8 million for the three months ended December 31, 2019, compared to $3.1 million for the same period in 2018.
Cash and cash equivalents, restricted cash and short-term bank deposits as of December 31, 2019 were $8.0 million as compared to $14.6 million as of December 31, 2018. Subsequent to the end of the fourth quarter, in February 2020, we raised gross proceeds of $4.76 million in a private placement.
Financial Results for the Twelve Months Ended December 31, 2019
Research and development expenses, net, were $10.5 million for the twelve months ended December 31, 2019, compared to $7.6 million for the same period in 2018. The increase is primarily due to a $0.9 million increase in salaries and related expenses, $0.2 million increase in share-based compensation, $0.4 million increase in materials, $0.5 million increase in subcontractor and consultant expenses and a $0.8 million increase in other research and development expenses, mainly related to our clinical trials, primarily in connection with our post-CE Mark clinical study and the U.S. pilot study. The increase in research and development expenses, net between 2019 and 2018 also includes a $0.1 million decrease in grants received from the Israel Innovation Authority.
General and administrative expenses were $3.6 million for the twelve months ended December 31, 2019, compared to $3.5 million for the same period in 2018. The increase is primarily due to an increase of $0.4 million in share-based compensation expenses and $0.2 million increase in other general expenses, offset in part by a $0.3 million decrease in salaries and related expenses and $0.1 million decrease in professional services expenses.
Operating loss was $14.1 million for the twelve months ended December 31, 2019, compared to $11.1 million in the same period in 2018.
Finance income, net, was $234,000 for the twelve months ended December 31, 2019, compared to $473,000 for the same period in 2018. The decrease in finance income, net was primarily as a result of a $252,000 decrease in finance income from a change in royalties' provision.
Net loss was $13.8 million for the twelve months ended December 31, 2019, compared to $10.6 million for the same period in 2018.
Net cash used in operating activities was $12.8 million for the twelve months ended December 31, 2019, compared to $10.1 million for the same period in 2018.
The number of outstanding ordinary shares as of December 31, 2019 was 8,272,906. Subsequent to December 31, 2019, the Company issued 2,720,178 ordinary shares in a private placement. As of February 25, 2020, the number of our outstanding ordinary shares was 10,997,714.
A copy of the Company's annual report on Form 20-F for the year ended December 31, 2019 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 firstname.lastname@example.org.
[Financial Tables to Follow]
Check-Cap is a clinical stage medical diagnostics company aiming to redefine colorectal cancer (CRC) prevention through the introduction of C-Scan®, the first and only patient-friendly preparation-free screening test to detect polyps before they transform into colorectal cancer. The Company's disruptive capsule-based screening technology aims to significantly increase screening adherence worldwide and enable millions of people to stay healthy. The C-Scan System 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. C-Scan is non-invasive and requires no preparation or sedation, allowing the patients to continue their daily routine with no interruption as the capsule is propelled through the gastrointestinal tract by natural motility.
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, 2019 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.
CHECK CAP LTD.
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands except share data)
2 0 1 9
2 0 1 8
Cash and cash equivalents
Short-term bank deposit
Prepaid expenses and other current assets
Total current assets
Property and equipment, net
Operating lease assets
Total non-current assets
Liabilities and shareholders' equity
Accounts payable and accruals
Other current liabilities
Employees and payroll accruals
Operating lease liabilities- current
Total current liabilities
Operating lease liabilities- net of current portion
Total non-current liabilities
Share capital, Ordinary shares, 2.4 NIS par value (90,000,000 and 30,000,000
Additional paid-in capital
Accumulated other comprehensive loss
Total shareholders' equity
Total liabilities and shareholders' equity
CHECK CAP LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share data)
Research and development expenses, net
General and administrative expenses
Finance income, net
Loss before income tax
Taxes on income
Net loss for the period
Change in fair value of cash flow hedge
Loss per share:
Net loss per ordinary share basic and diluted
Weighted average number of ordinary shares outstanding
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Adjustments required to reconcile net loss to net cash used in
Financial expenses (income), net
Changes in assets and liabilities items:
Decrease (increase) in prepaid and other current assets and non-
Increase (decrease) in trade accounts payable, accruals and
Increase (decrease) in employees and payroll accruals
Decrease in royalties provision
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment
Proceeds from (investment in) short-term bank and other
Net cash provided by (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Exercise of warrants into ordinary shares
Issuance of ordinary shares in the registered direct offerings,
Issuance of ordinary shares in the 2018 Public Offering
Net cash provided by financing activities
Net increase (decrease) in cash, cash equivalents and
Cash, cash equivalents and restricted cash at the
Cash, cash equivalents and restricted cash at the end of
Supplemental disclosure of non-cash flow information:
Cashless exercise of warrants to purchase ordinary shares
Purchase of property and equipment
Recognition of operating leases and operating lease liabilities
Right of use asset obtained in exchange for new operating
Supplemental disclosure of cash flow information
Cash paid for taxes
LifeSci Advisors, LLC
LifeSci Advisors, LLC
SOURCE Check-Cap Ltd.