Check-Cap Reports First Quarter 2019 Financial Results
ISFIYA, Israel, May 13, 2019 /PRNewswire/ -- Check-Cap Ltd. (the "Company" or "Check-Cap") (NASDAQ: CHEK) (NASDAQ: CHEKW), (NASDAQ: CHEKZ), a clinical stage medical diagnostics company advancing the development of C-Scan®, the first and only preparation-free ingestible capsule for the prevention of colorectal cancer through the detection of precancerous polyps, today announced financial results for the first quarter ended March 31, 2019.
Recent Highlights:
-- Announced the initiation of the U.S. pilot study of C-Scan®, and also
announced that the first patients have ingested the capsule at the NYU
School of Medicine
-- Announced that Mayo Clinic is the second trial site participating in the
ongoing U.S. pilot study of C-Scan®
-- Appointed Ms. Mira Rosenzweig to the position of Chief Financial
Officer, bringing nearly 20 years of executive financial management
experience to the Check-Cap team
-- Received an extension from the Israeli Ministry of Health, Medical
Device Division (known as AMAR) to commence commercial sales of C-Scan®
in Israel, valid until March 31, 2020
-- Completed a registered direct offering that raised gross proceeds of
$7.5 million that provides additional funding to advance clinical
development of C-Scan® in the U.S.
"During the first quarter, we achieved a significant milestone for our Company with the initiation of our U.S. pilot study of C-Scan® and subsequent successful ingestions of the capsule by patients at NYU School of Medicine and Mayo Clinic, two world-renowned healthcare institutions," said Alex Ovadia, chief executive officer of Check-Cap. "As we seek to advance development of C-Scan® in the U.S., we look forward to data from this important study to enable the design of our U.S. pivotal trial, which we expect to initiate during 2020. Obtaining regulatory approval in the U.S. remains our highest corporate priority."
"We believe the availability of a patient-friendly, preparation-free colon cancer screening alternative such as C-Scan® can fundamentally alter the screening and prevention paradigm and significantly increase screening rates globally, leading to improved outcomes for patients while creating long-term value for our shareholders," Mr. Ovadia concluded.
Financial Results for the First Quarter Ended March 31, 2019
Research and development expenses net, were $2.3 million for the three months ended March 31, 2019, compared to $1.6 million for the same period in 2018. The increase was primarily due to the Company's ongoing post-CE Mark clinical study and expanded preparations for the U.S. pilot study. This increase was partially offset by a $58,000 grant received from the Israel Innovation Authority.
General and administrative expenses were $825,000 for the three months ended March 31, 2019, compared to $485,000 for the same period in 2018. The increase was primarily due to a $408,000 increase in share based compensation expense. In addition, professional services fees were $92,000 higher in the three months ended March 31, 2019, compared to the three months ended March 31, 2018. This increase was partially offset by a $245,000 decrease in salaries and related expenses.
Operating loss was $3.2 million for the three months ended March 31, 2019, compared to an operating loss of $2.1 million for the same period in 2018.
Financial income, net was $14,000 for the three months ended March 31, 2019, compared to $21,000 of financial expenses, net for the same period in 2018.
Net loss was $3.2 million for the three months ended March 31, 2019, compared to $2.1 million for the same period in 2018.
Cash and cash equivalents, restricted cash and short-term bank deposits totaled $17.3 million as of March 31, 2019, compared with $14.6 million as of December 31, 2018.
Net cash used in operating activities was $3.8 million for the three months ended March 31, 2019, compared to $2.3 million for the same period in 2018.
In February 2019, we completed a registered direct offering for net proceeds of $6.5 million.
[Financial Tables to Follow]
About Check-Cap
Check-Cap is advancing the development of C-Scan®, the first and only preparation-free ingestible scanning capsule for the prevention of colorectal cancer (CRC) through the detection of precancerous polyps. The patient-friendly test has the potential to increase screening adherence and reduce the overall incidence of CRC. The C-Scan® system utilizes 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 patient 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, 2018 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 UNAUDITED BALANCE SHEETS
(U.S. dollars in thousands, except share and per share data)
March 31, December 31,
2019 2018
Assets
---
Current assets
Cash and cash equivalents 7,974 8,572
Restricted cash 350 350
Short-term bank deposit 9,000 5,643
Prepaid expenses and other
current assets 535 419
Total current assets 17,859 14,984
Non-current assets
Property and equipment, net 432 452
Total non-current assets 432 452
Total assets 15,436
18,291
Liabilities and shareholders'
equity
---
Current liabilities
Accounts payable and accruals
Trade 645 1,113
Other 318 214
Other current liabilities 12 35
Employees and payroll accruals 619 859
Total current liabilities 1,594 2,221
Non-current liabilities
Royalties provision 206 185
Total non-current liabilities 206 185
Shareholders' equity
---
Share capital 5,384 3,456
Additional paid-in capital 77,554 72,888
Accumulated other comprehensive
loss 4 (13)
Accumulated deficit (66,451) (63,301)
Total shareholders' equity 16,491 13,030
Total liabilities and
shareholders' equity 18,291 15,436
CHECK-CAP LTD.
CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share data)
Three months ended
March 31,
2019 2018
Research and
development
expenses, net 2,339 1,620
General and
administrative
expenses 825 485
Operating loss 3,164 2,105
Financial income
(expenses), net 14 (21)
Loss before tax 3,150 2,126
Taxes on income 1
Net loss 3,150 2,127
Comprehensive loss:
Net loss 3,150 2,127
Change in fair
value of cash flow
hedge (4)
Comprehensive loss 3,146 2,127
Net loss per
ordinary share (in
USD) basic and
diluted 0.44 1.27
Weighted average
number of ordinary
shares outstanding
-basic and
diluted (in
thousands) 7,114 1,674
CHECK-CAP LTD.
CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands, except per share data)
Three months ended
March 31,
2019 2018
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss for the period (3,150) (2,127)
Adjustments required to reconcile
net loss to net cash used in
operating activities:
Depreciation and amortization 28 43
Share-based compensation 83 (436)
Financial expense (income), net (27) 14
Changes in assets and liabilities
items:
Decrease (increase) in prepaid and
other current assets and non-
current assets (116) 8
Decrease in trade accounts payable,
accruals and other current
liabilities (375) (19)
Increase (decrease) in employees
and payroll accruals (240) 161
Increase in royalties provision 21 18
Net cash used in operating
activities (3,776) (2,338)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of property and equipment (3) (1)
Investment in short-term
investments/bank deposit (3,357)
Net cash provided by (used in)
investing activities (3,360) (1)
CASH FLOWS FROM FINANCING
ACTIVITIES
Issuance of ordinary shares in the
2019 registered direct Offering 6,511
Net cash provided by financing
activities 6,511
Effect of exchange rate changes on
cash, cash equivalents and
restricted cash 27 (14)
Net decrease in cash, cash
equivalents and restricted cash (598) (2,353)
Cash, cash equivalents and
restricted cash at the beginning
of the period 8,922 6,997
Cash, cash equivalents and
restricted cash at the end of the
period 8,324 4,644
Investor Contacts
Jeremy Feffer
LifeSci Advisors, LLC
212-915-2568
jeremy@lifesciadvisors.com
Meirav Gomeh-Bauer
LifeSci Advisors, LLC
+972(0)-54-476-4979
Meirav@lifesciadvisors.com
View original content to download multimedia:http://www.prnewswire.com/news-releases/check-cap-reports-first-quarter-2019-financial-results-300848690.html
SOURCE Check-Cap Ltd.
