ISFIYA, Israel, July 21, 2015 /PRNewswire/ -- Check-Cap Ltd. (the "Company" or "Check-Cap") (NASDAQ: CHEK, CHEKW), a clinical stage medical diagnostics company engaged in the development of an ingestible capsule for preparation-free, colorectal cancer screening, today provided a corporate update and announced financial results for the second quarter, ended June 30, 2015.
"We are encouraged by the progress we have made in recent months, including the successful imaging of clinically significant polyps in various anatomical segments of the colon," said Guy Neev, CEO of Check-Cap. "In order to accelerate the continued development of the Check-Cap system, we have also added an additional site to our CE Mark trial, and have expanded our talent base with the hiring of several new employees. We are continuing to make progress with our clinical program and remain committed to further validation of the preliminary efficacy of the Check-Cap system."
Financial Results for the Second Quarter Ended June 30, 2015
Research and development expenses, net were $1.4 million in the three months ended June 30, 2015 compared to $0.8 million in the same period in 2014. This increase was primarily due to on-going clinical trial expenses. General and administrative expenses were $1.2 million in the three months ended June 30, 2015 compared to $0.3 million in the same period in 2014. This increase was primarily due to an increase in payroll and related expenses, an increase in share-based payments, recruiting expenses as well as increased professional expenses and customary costs associated with being a publicly-traded company. Net loss for the three months ended June 30, 2015 was $3.9 million compared to $1.1 million in the same period in 2014. Non-GAAP net loss for the three months ended June 30, 2015 was $2.0 million compared to $1.1 million in the same period in 2014.
Extraordinary General Meeting of Shareholders – August 13, 2015
On August 13, Check-Cap will hold an Extraordinary General Meeting of Shareholders (1) to approve the adoption of the Check-Cap Ltd. Compensation Policy for Executive Officers and Directors; (2) to approve the adoption of the Check-Cap Ltd. 2015 Equity Incentive Plan and the Check-Cap Ltd. 2015 United States Sub-Plan to the 2015 Equity Incentive Plan for U.S. tax purposes; and (3) to approve the terms of engagement of Mr. William Densel, as Chief Executive Officer. Proxy materials are available on http://ir.check-cap.com/.
Use of Non-GAAP Financial Results
In addition to disclosing financial results calculated in accordance with International Financial Reporting Standards as issued by International Accounting Standards Board (GAAP), the Company's earnings release contains Non-GAAP financial measures of comprehensive loss for the period that exclude the effects of share-based compensation, changes in royalties and other financial liabilities, and Non-GAAP financial measures of shareholders' equity for the period end that excludes the effect of other financial liabilities. The Company's management believes the Non-GAAP financial information provided in this release is useful to investors' understanding and assessment of the Company's on-going operations. Management also uses both GAAP and Non-GAAP information in evaluating and operating business internally and as such deemed it important to provide all this information to investors. The Non-GAAP financial measures disclosed by the Company should not be considered in isolation or as a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. Reconciliations between GAAP measures and Non-GAAP measures are provided later in this press release.
About Check-Cap
Check-Cap is a clinical stage medical diagnostics company focused on the development of innovative imaging devices. The Company's lead product is an ingestible capsule for the identification of colorectal cancer and pre-cancerous lesions in the colon. Utilizing proprietary, ultra-low-energy X-ray-based technology, the capsule safely generates high-resolution, 3-dimensional imagery of the interior of the colon. Without requiring traditional bowel preparation or modifications to a person's diet and activities, Check-Cap's system is designed to be patient-friendly and to increase compliance with colorectal cancer screening recommendations. The Check-Cap imaging system is not cleared for marketing in any jurisdiction.
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 "Special Note On Forward-looking Statements" and "Risk Factors" in the Company's Annual Report on Form 20-F 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.
Financial Tables to Follow
|
CHECK-CAP LTD. | |||
|
June 30, 2015 |
December 31, 2014 | ||
|
Assets |
(Unaudited) |
(Audited) | |
|
Current assets |
|||
|
Cash and cash equivalents |
19,083 |
1,075 | |
|
Restricted deposit |
46 |
46 | |
|
Receivables on account of share options |
- |
4,800 | |
|
Other current assets |
322 |
117 | |
|
Total current assets |
19,451 |
6,038 | |
|
Non-current assets |
|||
|
Property and equipment, net |
258 |
191 | |
|
Deferred issuance costs |
- |
1,556 | |
|
Total non-current assets |
258 |
1,747 | |
|
Total assets |
19,709 |
7,785 | |
|
Liabilities and shareholders' equity |
|||
|
Current liabilities |
|||
|
Trade accounts payable |
491 |
333 | |
|
Other current liabilities |
305 |
1,369 | |
|
Employee benefits |
648 |
1,122 | |
|
Total current liabilities |
1,444 |
2,824 | |
|
Non-current liabilities |
|||
|
Royalties provision |
2,751 |
2,509 | |
|
Other financial liabilities |
6,444 |
225 | |
|
Total non-current liabilities |
9,195 |
2,734 | |
|
Shareholders' equity |
|||
|
Preferred share capital |
- |
226 | |
|
Ordinary share capital |
546 |
53 | |
|
Premium on preferred shares |
- |
21,167 | |
|
Share options |
- |
6,593 | |
|
Premium on ordinary shares |
40,100 |
6 | |
|
Capital reserve for ordinary share-based payment |
3,029 |
743 | |
|
Accumulated deficit |
(34,605) |
(26,561) | |
|
Total shareholders' equity |
9,070 |
2,227 | |
|
Total liabilities and shareholders' equity |
19,709 |
7,785 | |
|
SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP SHAREHOLDERS' EQUITY (U.S. dollars in thousands) | ||
|
June 30, 2015 |
||
|
(Unaudited) |
||
|
GAAP total shareholders' equity |
9,070 |
|
|
Other financial liabilities |
6,444 |
|
|
Non-GAAP total shareholders' equity |
15,514 |
|
|
CHECK-CAP LTD. | |||||||
|
Six months ended June 30, |
Three months ended June 30, | ||||||
|
2015 |
2014 |
2015 |
2014 | ||||
|
(Unaudited) | |||||||
|
Research and development expenses, net |
2,733 |
1,640 |
1,375 |
843 | |||
|
General and administrative expenses |
3,700 |
564 |
1,193 |
269 | |||
|
Operating loss |
6,433 |
2,204 |
2,568 |
1,112 | |||
|
Finance income |
(202) |
(60) |
(190) |
(20) | |||
|
Finance expenses |
1,813 |
85 |
1,555 |
50 | |||
|
Finance expenses, net |
1,611 |
25 |
1,365 |
30 | |||
|
Loss for the period |
8,044 |
2,229 |
3,933 |
1,142 | |||
|
Total comprehensive loss for the period |
8,044 |
2,229 |
3,933 |
1,142 | |||
|
Loss per ordinary share (in USD) Basic and diluted |
0.77 |
1.97 |
0.30 |
1.00 | |||
|
Weighted average number of ordinary shares outstanding - basic and diluted (in thousands) |
10,503 |
1,627 |
13,266 |
1,627 | |||
|
SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS | |||||||
|
Six months ended June 30, |
Three months ended June 30, | ||||||
|
2015 |
2014 |
2015 |
2014 | ||||
|
(Unaudited) | |||||||
|
GAAP total comprehensive loss for the period |
8,044 |
2,229 |
3,933 |
1,142 | |||
|
Share-based compensation (1) |
(2,689) |
(40) |
(422) |
(20) | |||
|
Current changes in provision for royalties and other financial liabilities |
(1,650) |
(28) |
(1,518) |
(18) | |||
|
Non-GAAP total comprehensive loss for the period |
3,705 |
2,161 |
1,993 |
1,104 | |||
|
(1) Share based compensation: |
|||||||
|
Research and development expenses, net |
571 |
32 |
115 |
16 | |||
|
General and administrative expenses |
2,118 |
8 |
307 |
4 | |||
|
2,689 |
40 |
422 |
20 | ||||
CONTACT:
Investors
David Carey
Lazar Partners Ltd.
212-867-1768
dcarey@lazarpartners.com
SOURCE Check-Cap Ltd.