Core Insights - MBody AI has secured over 98% shareholder approval for its merger with Check-Cap, positioning it as a leading player in the embodied AI sector on Nasdaq [2][9] - The merger is expected to close in the coming weeks, subject to customary conditions, marking a significant transformation for Check-Cap into a dedicated embodied AI company [2][9] Industry Trends - U.S. enterprises are rapidly adopting full-facility embodied AI systems, driven by the need for significant cost savings and addressing labor volatility and compliance pressures [4] - Automation is becoming a strategic necessity rather than an experimental endeavor, indicating a shift in how businesses view robotics and AI integration [4] Company Overview - MBody AI operates the MBody AI Orchestrator™, a hardware-agnostic platform that integrates various robotic and sensor systems, facilitating automation across multiple industries [5][6] - The platform allows for reduced risk, fast deployment, and measurable ROI in sectors such as hospitality, healthcare, logistics, retail, and data centers [6] Leadership Insights - David Lontini, Chairman of Check-Cap, emphasized the significance of the 98% approval rate, highlighting the merger's potential to create a unique embodied AI company at a critical time for enterprise adoption [7] - John Fowler, CEO of MBody AI, noted that the demand for a unified orchestration platform is growing, as customers seek comprehensive solutions rather than fragmented hardware [7] Company Positioning - MBody AI is recognized as a global leader in embodied AI, aiming to create an autonomous workforce and already serving Fortune 500 companies [8] - The merger with Check-Cap will enhance MBody AI's market presence and capabilities in the embodied AI landscape [9]

Core Insights - MBody AI and Check-Cap Ltd. are merging to enhance the adoption of embodied artificial intelligence, positioning Check-Cap shareholders for significant value creation through MBody AI's established success [1][4] - The MBody AI Orchestrator™ platform is being utilized by Fortune 500 companies, serving as a critical integration tool for various robotic and intelligent devices, promoting a unified, self-learning network [2][3] - MBody AI's technology is transforming physical environments into intelligent, self-optimizing systems, with reported benefits including up to 40% labor reduction and 80% uptime improvement [3][4] Company Overview - MBody AI is recognized as a leader in embodied artificial intelligence, providing a hardware-agnostic platform that integrates robotic and sensor systems across multiple industries [6] - Check-Cap Ltd. is set to become a global leader in embodied AI through its merger with MBody AI, enhancing its market position and potential for stock appreciation [6][4] Market Potential - Industry analysts predict that the embodied AI and AI robotics sectors will generate over $16 trillion in shareholder value in the near future, with MBody AI positioned as a foundational player in this ecosystem [5]

Core Viewpoint - Premarket trading is showing notable activity with significant price movements indicating potential investment opportunities before the market opens [1] Premarket Gainers - FGI Industries Ltd. (FGI) is up 278% at $15.02 [3] - Senmiao Technology Limited (AIHS) is up 96% at $4.22 [3] - Conifer Holdings, Inc. (CNFR) is up 86% at $2.11 [3] - WEBTOON Entertainment Inc. (WBTN) is up 39% at $20.81 [3] - Nukkleus Inc. (NUKK) is up 18% at $6.08 [3] - Tantech Holdings Ltd (TANH) is up 12% at $2.13 [3] - Check-Cap Ltd. (CHEK) is up 9% at $2.33 [3] - Ivanhoe Electric Inc. (IE) is up 8% at $9.71 [3] - Wolfspeed, Inc. (WOLF) is up 8% at $3.21 [3] - Bolt Projects Holdings, Inc. (BSLK) is up 5% at $3.95 [3] Premarket Losers - Envirotech Vehicles, Inc. (EVTV) is down 17% at $2.27 [4] - Dave & Buster's Entertainment, Inc. (PLAY) is down 15% at $20.40 [4] - NanoVibronix, Inc. (NAOV) is down 12% at $9.37 [4] - ADTRAN Holdings, Inc. (ADTN) is down 10% at $9.37 [4] - Rain Enhancement Technologies Holdco, Inc. (RAIN) is down 10% at $6.00 [4] - CNS Pharmaceuticals, Inc. (CNSP) is down 7% at $8.50 [4] - AVITA Medical, Inc. (RCEL) is down 7% at $6.22 [4] - Vince Holding Corp. (VNCE) is down 7% at $2.60 [4] - Monte Rosa Therapeutics, Inc. (GLUE) is down 6% at $6.50 [4] - Meiwu Technology Company Limited (WNW) is down 6% at $2.06 [4]

Company Overview - Check-Cap Ltd. has entered into a definitive merger agreement with MBody AI, leading to a significant increase in its stock price [1][2] - The merger is seen as a strategic move to enter a high-growth industry while maintaining focus on its legacy business [2] Stock Performance - Check-Cap shares surged by 183% to $2.10 in pre-market trading following the merger announcement [2] - Other companies also experienced notable stock movements, with Helius Medical Technologies gaining 163.2% and InnSuites Hospitality Trust increasing by 118% in pre-market trading [6]

Core Insights - Several healthcare and biotech stocks saw significant price movements in after-hours trading on September 12, with notable gains in companies like Penumbra, Check-Cap, Adaptimmune Therapeutics, and NewAmsterdam Pharma, indicating a volatile session for the sector [1] Company Summaries Penumbra Inc. (PEN) - Penumbra's stock closed at $272.73 during regular trading, down by $3.67 or 1.33%, but rebounded to $289.86 in after-hours, gaining 6.28% [2] - The trading range for the day was $271.83 to $280.14, with a volume of 454,478 shares, slightly below its average of 472,087 [3] - The company has a market capitalization of approximately $10.64 billion and a trailing price-to-earnings ratio of 71.96 based on earnings per share of $3.79 [3] - Penumbra raised its full-year 2025 revenue guidance to $1.355 billion - $1.370 billion, reflecting a growth of 13% - 15% over 2024 revenue of $1.195 billion, and projects a 20% - 21% growth in its U.S. thrombectomy segment [5] - The company appointed Shruthi Narayan as its new president, indicating potential strategic shifts [6] Check-Cap Ltd. (CHEK) - Check-Cap's stock surged from $0.7459 to $2.1600 in after-hours trading, marking a gain of 191.22%, driven by a strategic merger announcement [6] - During regular trading, the stock gained 8.09%, closing at $0.7459, with a trading range of $0.6860 to $0.7602 and a volume of 67,178 shares [7] - The merger with MBody AI aims to enhance Check-Cap's colorectal cancer screening capabilities through AI integration [8] Adaptimmune Therapeutics plc (ADAP) - Adaptimmune's stock rose from $0.0560 to $0.0651 in after-hours trading, a gain of 16.25%, following a 10.89% increase during regular hours [8] - For Q2 2025, the company reported a net loss of $30.3 million, or $0.02 per share, with total revenue of $13.7 million, primarily from product sales of TECELRA [9] - Adaptimmune entered a definitive agreement to sell certain cell therapies for $55 million upfront, with potential future milestone payments of up to $30 million, allowing it to repay debt and restructure for value maximization [10] NewAmsterdam Pharma Company N.V. (NAMS) - NewAmsterdam's shares rose from $24.19 to $26.18 in after-hours trading, an 8.23% gain, following a 9.06% decline during the day [11] - The stock's recovery is attributed to optimism surrounding its lead candidate, obicetrapib, which has received regulatory review acceptance from the EMA [11] - The company reported Q2 2025 revenue of $16.45 million and a net loss of $14.92 million, improving from a $0.41 loss per share in the same quarter of 2024 [13]

Group 1 - U.S. stock futures are trading slightly higher, indicating a positive market sentiment [1] - Hain Celestial Group Inc. is expected to report quarterly earnings of 3 cents per share on revenue of $371.46 million, with shares gaining 1.9% to $2.19 in after-hours trading [2] - MBody AI and Check Cap Ltd. have entered into a definitive merger agreement, resulting in Check-Cap shares jumping 206.3% to $2.27 in after-hours trading [2] - High Tide Inc. is anticipated to post a quarterly loss of 1 cent per share on revenue of $107.31 million, with shares gaining 2% to $3.50 in after-hours trading [2] - Multi Ways Holdings Ltd. reported a registered direct offering of $1.49 million for 9 million shares and warrants, leading to a 17.8% dip in shares to $0.28 in after-hours trading [2] - Dave & Buster's Entertainment Inc. is expected to report quarterly earnings of 92 cents per share on revenue of $562.78 million, with shares gaining 0.3% to $23.70 in after-hours trading [2]

Core Viewpoint - The merger between MBody AI and Check-Cap aims to create a combined company focused on embodied AI for the autonomous workforce, with Check-Cap continuing its legacy research and development activities [1][3]. Company Overview - MBody AI is a leading AI company specializing in embodied AI, with a market forecast to reach $40 trillion by 2050, contributing over $16 trillion in additional value to global equity markets [2]. - The company is developing a proprietary AI stack designed to power intelligent systems that can learn, adapt, and optimize in real time, with initial applications in hospitality and plans for expansion into warehousing, office management, and healthcare [2]. Merger Details - The merger will result in MBody AI equityholders owning 90% and Check-Cap equityholders owning 10% of the combined company on a fully diluted basis [4]. - The combined entity will be named "MBody AI Ltd." and will retain Check-Cap's legacy assets, including patents and proprietary medical equipment [3]. Strategic Synergies - The merger is expected to create synergies with Check-Cap's Ghost Kitchen franchise rights in New Jersey, leveraging shared technology and operational resources [5]. Approval Process - The merger has been approved by the boards of both companies and is pending approval from Check-Cap shareholders at the Annual General Meeting scheduled for October 17, 2025 [6]. Financial Compliance - Check-Cap received a notification from Nasdaq regarding non-compliance with listing rules, requiring a plan to regain compliance by October 20, 2025, which the merger and related financing are expected to enhance [7][8].

Financial Performance and Expenses - Research and development expenses for the years ended December 31, 2024, 2023, and 2022 were approximately $0, $8.3 million, and $14.3 million, respectively[285]. - A significant workforce reduction was announced in June 2023 to reduce cash burn and focus on essential research activities[332]. - The company does not currently have any outstanding investments and aims to preserve principal while maximizing interest income[713]. - The company is exposed to market risks from changes in interest rates related to financial investments in cash and deposits[714]. - The company does not use derivative financial instruments to limit exposure to interest rate risk[714]. Regulatory and Compliance - The company is subject to extensive regulation by the FDA and other regulatory bodies for the C-Scan medical device, which includes product design, testing, and compliance with safety standards[306]. - The FDA's 510(k) clearance process typically takes approximately 6 to 9 months, although it can take significantly longer[307]. - Special 510(k)s are processed within 30 days of receipt, aimed at devices with established evaluation methods[308]. - Class II devices generally require 510(k) premarket clearance before commercial marketing in the U.S.[309]. - A PMA application must be supported by extensive data, and the review process may take at least 12 to 18 months[314][315]. - The FDA has 45 days to determine if a PMA application is complete for substantive review[315]. - The Breakthrough Device Program allows expedited access for devices that provide significant advantages or represent breakthrough technology[318]. - Clinical trials are almost always required to support a PMA application or de novo reclassification petition[319]. - The FDA requires manufacturers to report any device-related deaths or serious injuries[321]. - Compliance with Quality Systems Regulation (QSR) is necessary to maintain FDA clearance or approval[322]. - The FDA has broad regulatory compliance and enforcement powers, including the ability to conduct inspections and impose sanctions[323]. - The company is subject to extensive regulatory scrutiny, including the federal Anti-Kickback Statute and the False Claims Act, which could impact operations[337]. Product Development and Clinical Trials - The company has expanded its manufacturing capacity to support larger clinical volumes expected in the early commercialization stage during 2022 and 2023[302]. - The company received an IIA grant approval in January 2021 amounting to $620,000 to support the transition from research and development to manufacturing[302]. - The C-Scan system has received FCC authorization, ensuring compliance with radio frequency emission standards[335]. - The C-Scan capsule is currently undergoing clinical trials in the U.S., with engagement at various sites progressing slower than expected due to compliance with regulatory requirements[346]. - In December 2019, a pilot study of C-Scan enrolled 45 patients, with 39 completing the procedure and reporting higher satisfaction compared to colonoscopy[326]. - The U.S. pivotal study design includes two parts: a calibration study with up to 200 patients and a randomized study comparing C-Scan to colonoscopy with up to 800 patients[328]. - As of March 2023, the initiation of the powered portion of the U.S. pivotal study was postponed due to efficacy results not meeting goals[331]. Market and Competitive Landscape - The company faces competition from established manufacturers of CRC screening technologies, including Olympus, GE Healthcare, and Exact Sciences, which have greater financial resources and distribution channels[289]. - The company must obtain reimbursement coverage from third-party payors for procedures using C-Scan to ensure commercial viability[300]. - Coverage and reimbursement for C-Scan will depend on various third-party payors and their interpretations of what is considered "reasonable and necessary" for coverage[336]. - The cost-effectiveness of CRC screening devices is influenced by patient adherence, which is crucial for obtaining third-party payer reimbursement[363]. Licensing and Agreements - The company has entered into an exclusive license agreement with the University of Missouri, agreeing to pay royalties ranging from $0.30 to $5.00 per C-Scan unit, with a total cap of $15 million[288]. - The company entered into a business combination agreement with Nobul on March 25, 2024, after previous agreements did not receive shareholder approval[332]. Regulatory Approvals and Market Potential - The company received the CE mark for C-Scan on January 9, 2018, and the renewal of this mark is valid until December 1, 2026[349]. - The AMAR approval for marketing and sale of C-Scan in Israel is valid until December 31, 2024[350]. - As of December 31, 2023, approximately 300 million people in the U.S. have coverage for capsule endoscopy of the small bowel, but there is currently no reimbursement for colon capsule endoscopy for CRC screening[368]. - Colorectal cancer (CRC) is expected to cause over 52,900 deaths in the U.S. in 2025, highlighting the importance of effective screening methods[358]. - The 5-year relative survival rate for localized CRC is 91.5%, emphasizing the critical nature of early detection[359]. - COVID-19 caused a significant decrease in CRC screening, with estimates of 1,176,942 to 2,014,164 fewer screenings between 2020 and 2023[360]. Financial Exchange Rates - The exchange rate between the U.S. dollar and the NIS increased by 1.09% in 2024, while the Euro increased by 5.25%[712]. - The exchange rate between the U.S. dollar and the NIS increased by 3.07% in 2023, while the Euro decreased by 4.26%[712]. - The exchange rate between the U.S. dollar and the NIS increased by 13.15% in 2022, while the Euro increased by 6.12%[712].

Core Viewpoint - Check-Cap Ltd. publicly condemns MediPharm Labs and its Chairman Chris Taves for spreading false and defamatory statements aimed at harming Check-Cap's reputation during a sensitive time for Israeli companies [1][2][5]. Group 1: Allegations and Responses - Check-Cap is disturbed by Taves' actions, which are seen as exploiting wartime circumstances to spread false information that could negatively impact Check-Cap's reputation and stock price [2][5]. - MediPharm Labs' May 23, 2025 press release included statements from Taves that Check-Cap believes to be false, particularly regarding alleged deficiencies in Check-Cap's public disclosures [3][4]. - Check-Cap accuses Taves of misusing his position to manipulate Check-Cap's stock price, violating U.S. securities laws [4]. Group 2: Company Background - Check-Cap is a clinical-stage medical diagnostics company focused on colorectal cancer screening through its investigational device, C-Scan, which is not yet available for sale in the U.S. [6].

[Financial Statements](index=1&type=section&id=Financial%20Statements) This section presents the company's unaudited financial statements, including balance sheets, statements of operations, changes in equity, and cash flows, for recent periods [Consolidated Unaudited Balance Sheets](index=1&type=section&id=CONSOLIDATED%20UNAUDITED%20BALANCE%20SHEETS) The company's balance sheet as of June 30, 2024, shows a decrease in total assets and shareholders' equity compared to December 31, 2023, primarily driven by a significant reduction in short-term bank deposits and an increased accumulated deficit Consolidated Unaudited Balance Sheets (Amounts in thousands of US dollars) | Item | June 30, 2024 (Unaudited, in thousands of US dollars) | December 31, 2023 (Audited, in thousands of US dollars) | Change (in thousands of US dollars) | Percentage Change | | :-------------------------------- | :-------------------------- | :------------------------ | :----- | :---------------- | | **Assets** | | | | | | Cash and cash equivalents | $17,824 | $8,844 | +$8,980 | +101.5% | | Short-term bank deposit | $- | $15,912 | -$15,912 | -100.0% | | Total current assets | $17,954 | $24,856 | -$6,902 | -27.8% | | Total assets | $18,090 | $25,017 | -$6,927 | -27.7% | | **Liabilities and Shareholders' Equity** | | | | | | Total current liabilities | $913 | $1,330 | -$417 | -31.4% | | Total shareholders' equity | $17,177 | $23,687 | -$6,510 | -27.5% | | Accumulated deficit | $(151,173) | $(144,861) | -$6,312 | +4.4% | - Total assets decreased by **27.7%** from **$25,017 thousand** at December 31, 2023, to **$18,090 thousand** at June 30, 2024, largely due to a **100% decrease** in short-term bank deposits, offset by a **101.5% increase** in cash and cash equivalents[2](index=2&type=chunk) - Total shareholders' equity decreased by **27.5%** from **$23,687 thousand** to **$17,177 thousand**, primarily driven by an increase in the accumulated deficit from **$(144,861) thousand** to **$(151,173) thousand**[2](index=2&type=chunk) [Consolidated Unaudited Statements of Operations](index=2&type=section&id=CONSOLIDATED%20UNAUDITED%20STATEMENTS%20OF%20OPERATIONS) For the six months ended June 30, 2024, the company significantly reduced its net loss and operating loss compared to the same period in 2023, largely due to a substantial decrease in research and development expenses Consolidated Unaudited Statements of Operations (Amounts in thousands of US dollars) | Item | Six months ended June 30, 2024 (in thousands of US dollars) | Six months ended June 30, 2023 (in thousands of US dollars) | Change (in thousands of US dollars) | Percentage Change | | :---------------------------------- | :----------------------------- | :----------------------------- | :----- | :---------------- | | Research and development expenses, net | $(335) | $(8,151) | +$7,816 | -95.9% | | General and administrative expenses | $(6,484) | $(2,762) | -$3,722 | +134.8% | | Operating loss | $(6,819) | $(12,277) | +$5,458 | -44.5% | | Finance Income, net | $507 | $957 | -$450 | -47.0% | | Net loss for the period | $(6,312) | $(11,320) | +$5,008 | -44.2% | | Net loss per ordinary share basic and diluted | $(1.08) | $1.94 | -$3.02 | -155.7% | - Net loss for the period decreased by **44.2%** from **$(11,320) thousand** in 2023 to **$(6,312) thousand** in 2024[5](index=5&type=chunk) - Research and development expenses, net, decreased significantly by **95.9%** from **$(8,151) thousand** in 2023 to **$(335) thousand** in 2024[5](index=5&type=chunk) - General and administrative expenses increased by **134.8%** from **$(2,762) thousand** in 2023 to **$(6,484) thousand** in 2024[5](index=5&type=chunk) [Consolidated Unaudited Statements of Changes in Shareholders' Equity](index=3&type=section&id=CONSOLIDATED%20UNAUDITED%20STATEMENTS%20OF%20CHANGES%20IN%20SHAREHOLDERS'%20EQUITY) The statements of changes in shareholders' equity reflect a decrease in total equity from January 1, 2024, to June 30, 2024, primarily due to the net loss incurred during the period, which increased the accumulated deficit Consolidated Unaudited Statements of Changes in Shareholders' Equity (Amounts in thousands of US dollars) | Item | Balance as of January 1, 2024 (in thousands of US dollars) | Balance as of June 30, 2024 (in thousands of US dollars) | Change (in thousands of US dollars) | | :-------------------------- | :---------------------------- | :-------------------------- | :----- | | Number of Ordinary Shares | 5,850,555 | 5,851,042 | +487 | | Share capital, Amount | $83,746 | $83,753 | +$7 | | Additional paid-in capital | $84,802 | $84,597 | -$205 | | Accumulated deficit | $(144,861) | $(151,173) | -$6,312 | | Total shareholders' equity | $23,687 | $17,177 | -$6,510 | - Total shareholders' equity decreased by **$6,510 thousand** from January 1, 2024, to June 30, 2024, primarily due to a net loss of **$6,312 thousand**[8](index=8&type=chunk) - The accumulated deficit increased by **$6,312 thousand** during the six months ended June 30, 2024[8](index=8&type=chunk) [Consolidated Unaudited Statements of Cash Flows](index=4&type=section&id=CONSOLIDATED%20UNAUDITED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2024, the company experienced a net increase in cash and cash equivalents, driven by a significant inflow from investing activities, primarily changes in short-term deposits, despite continued cash usage in operating activities Consolidated Unaudited Statements of Cash Flows (Amounts in thousands of US dollars) | Cash Flow Activity | Six months ended June 30, 2024 (in thousands of US dollars) | Six months ended June 30, 2023 (in thousands of US dollars) | Change (in thousands of US dollars) | | :------------------------------------------ | :----------------------------- | :----------------------------- | :----- | | Net cash used in operating activities | $(6,932) | $(9,824) | +$2,892 | | Net cash provided by (used in) investing activities | $15,912 | $7,986 | +$7,926 | | Net cash provided by financing activities | $- | $- | $0 | | Net increase(decrease) in cash, cash equivalents and restricted cash | $8,980 | $(1,838) | +$10,818 | | Cash, cash equivalents and restricted cash at the end of the period | $17,824 | $2,604 | +$15,220 | - Net cash used in operating activities decreased by **29.4%** from **$(9,824) thousand** in 2023 to **$(6,932) thousand** in 2024[11](index=11&type=chunk) - Net cash provided by investing activities increased significantly by **99.2%** from **$7,986 thousand** in 2023 to **$15,912 thousand** in 2024, primarily due to changes in short-term deposits[11](index=11&type=chunk) - The company reported a net increase in cash, cash equivalents and restricted cash of **$8,980 thousand** for the six months ended June 30, 2024, compared to a decrease of **$(1,838) thousand** in the prior year period[11](index=11&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=5&type=section&id=NOTES%20TO%20UNAUDITED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed explanations and disclosures for the unaudited consolidated financial statements, covering general information, business developments, and significant events [NOTE 1 - General Information](index=5&type=section&id=NOTE%201%20-%20GENERAL%20INFORMATION) This section provides general information about Check Cap Ltd., detailing its corporate structure, the strategic shift from its original medical diagnostics business due to clinical trial setbacks, and its ongoing efforts to pursue strategic alternatives, including multiple business combination agreements and related financial transactions. It also addresses the impact of the Israel-Hamas conflict and recent litigation [General Business Overview and Strategic Shift](index=5&type=section&id=General%20Business%20Overview%20and%20Strategic%20Shift) Check Cap Ltd., an Israeli clinical-stage medical diagnostics company, discontinued its C-Scan® colorectal cancer screening program due to insufficient efficacy results, leading to a significant workforce reduction and a strategic pivot towards exploring alternative business options. The company has not generated revenue and has a substantial accumulated deficit - Check Cap Ltd. was engaged in clinical-stage medical diagnostics, aiming to redefine colorectal cancer (CRC) screening with C-Scan®[15](index=15&type=chunk) - On March 21, 2023, the Company announced that efficacy results from its calibration studies did not meet the goal to proceed to the U.S. pivotal study, leading to a postponement and cost reduction plan[16](index=16&type=chunk)[17](index=17&type=chunk) - On June 6, 2023, the Board of Directors decided to pursue strategic options, significantly reduced its workforce to two employees, discontinued calibration studies, and does not plan to commence the U.S. pivotal study[18](index=18&type=chunk)[19](index=19&type=chunk) - The Company has not yet generated revenues and, as of June 30, 2024, had an accumulated deficit of approximately **$151,173 thousand**[20](index=20&type=chunk)[2](index=2&type=chunk) [Entry into a business combination agreement with Keystone](index=5&type=section&id=Entry%20into%20a%20business%20combination%20agreement%20with%20Keystone) The company entered into a business combination agreement with Keystone Dental Holdings, Inc. in August 2023, but it was terminated in December 2023 due to the lack of requisite shareholder approval. This termination led to transaction-related expenses and a change in the Company's Board of Directors - On August 16, 2023, the Company announced entry into a business combination agreement (BCA) with Keystone Dental Holdings, Inc.[21](index=21&type=chunk) - The BCA was terminated on December 24, 2023, by Keystone, as it did not receive the requisite majority for approval by Check-Cap's shareholders at the Annual General Meeting on December 18, 2023[24](index=24&type=chunk)[25](index=25&type=chunk) - As a result of the failed business combination, the Company incurred transaction-related expenses recorded in General and Administrative expenses, and the Board of Directors was replaced by new members[26](index=26&type=chunk) [Israel-Hamas Conflict](index=6&type=section&id=Israel-Hamas%20Conflict) The ongoing Israel-Hamas conflict, which began on October 7, 2023, has not adversely affected the Company's operations to date, primarily due to its robust backup IT systems and remote work capabilities - The Israel-Hamas conflict began on October 7, 2023, with attacks on civilian and military targets[27](index=27&type=chunk) - To date, the Company's operations have not been adversely affected by the war[27](index=27&type=chunk) - The Company has back-up IT systems and remote work ability to ensure operational continuity in emergencies[27](index=27&type=chunk) [Entry into a business combination agreement with Nobul](index=6&type=section&id=Entry%20into%20a%20business%20combination%20agreement%20with%20Nobul) On March 25, 2024, the company entered into a new business combination agreement with Nobul AI Corp. If consummated, Check-Cap's ordinary shares will be delisted from Nasdaq, and its security holders are expected to own approximately 15% of Nobul. The transaction is contingent on shareholder and exchange approvals, and the Board approved an immediate payment of approximately $3,810 to Nobul for transaction costs - On March 25, 2024, the Company entered into a business combination agreement (Nobul BCA) with Nobul AI Corp[28](index=28&type=chunk) - If the Nobul Business Combination is consummated, Check-Cap's ordinary shares will be delisted from Nasdaq and deregistered under the Securities Exchange Act of 1934[28](index=28&type=chunk) - Check-Cap security holders are expected to own approximately **15%** of Nobul on a fully diluted basis, subject to adjustments based on Check-Cap's net cash at closing[33](index=33&type=chunk) - The transactions are subject to approval by the Company's and Nobul's shareholders, Nasdaq listing approval for Nobul Common Shares, and TSX listing approval[34](index=34&type=chunk) - On April 21, 2024, the Board approved an immediate payment of approximately **$3,810 thousand** to Nobul for reimbursement of Transaction Costs[35](index=35&type=chunk) [Transfer of Company Funds to Canadian Subsidiary](index=8&type=section&id=Transfer%20of%20Company%20Funds%20to%20Canadian%20Subsidiary) On June 20, 2024, the Board approved transferring approximately $17,250 of the Company's funds from Israeli banks to its Canadian subsidiary's bank account, retaining $750 in Israel - On June 20, 2024, the Board approved transferring approximately **$17,250 thousand** of the Company's funds from Israeli banks (Bank Leumi and Discount Bank) to its Canadian subsidiary's account at Royal Bank of Canada[36](index=36&type=chunk) - Approximately **$750 thousand** of the Company's funds will remain in its accounts at Bank Leumi in Israel[36](index=36&type=chunk) [Approval to Enter into a Loan Agreement with Nobul](index=8&type=section&id=Approval%20to%20Enter%20into%20a%20Loan%20Agreement%20with%20Nobul) On July 28, 2024, the Board approved a $6,000 loan to Nobul, subsequently ratified on September 8, 2024. This loan bears an annual interest rate of 5% and is due 30 days after the Nobul Business Combination Agreement is either terminated or completed, with provisions for set-off against termination fees - On July 28, 2024, the Board approved a loan to Nobul in the principal amount of **$6,000 thousand**, which was ratified on September 8, 2024[37](index=37&type=chunk)[38](index=38&type=chunk) - The loan bears interest at **5%** per annum, payable annually in arrears[39](index=39&type=chunk) - The aggregate amount of the loan is due 30 days following the termination or completion of the Nobul Business Combination Agreement, with a provision for set-off against termination fees[38](index=38&type=chunk)[40](index=40&type=chunk) [Creation of Segregated Account](index=8&type=section&id=Creation%20of%20Segregated%20Account) An amending letter to the Nobul BCA, approved on September 8, 2024, obligates the Company to deposit $11,000 into a segregated, interest-bearing bank account. These funds are designated for Nobul's acquisition targets or growth initiatives, reducing the Net Cash Target, and would revert to Check-Cap if the BCA terminates. The $11,000 was transferred in August 2024 - On September 8, 2024, the Board approved an amending letter to the Nobul BCA, obligating the Company to deposit **$11,000 thousand** into a designated, segregated, and interest-bearing bank account[41](index=41&type=chunk) - Funds in this account are for Nobul's accretive acquisition targets or other growth initiatives and reduce the Net Cash Target on a dollar-for-dollar basis[41](index=41&type=chunk) - If the BCA is terminated, remaining funds in the segregated account, plus interest, will accrue to the Company[41](index=41&type=chunk) - In August 2024, the Company transferred **$11,000 thousand** into an account held at Royal Bank of Canada in Toronto, Canada, under the name of Nobul AI Corp[42](index=42&type=chunk) [Entry into a Second Loan Agreement with Nobul](index=10&type=section&id=Entry%20into%20a%20Second%20Loan%20Agreement%20with%20Nobul) On December 23, 2024, the Board approved a second $6,000 loan to Nobul, funded from the previously established segregated account. This loan, bearing 5% annual interest, is intended for identified acquisition targets and growth initiatives, with approximately $2,100 already used for these purposes and $700 for Company expenses from the segregated account - On December 23, 2024, the Board approved a Second Loan Agreement with Nobul for a principal amount of **$6,000 thousand**[45](index=45&type=chunk) - The Second Loan will be funded from the previously created designated, segregated, and interest-bearing bank account[46](index=46&type=chunk) - The loan bears interest at **5%** per annum and is for identified acquisition targets and growth initiatives of Nobul[45](index=45&type=chunk)[46](index=46&type=chunk) - As of the filing date, approximately **$2,100 thousand** from the Segregated Account has been used for acquisition targets and growth initiatives, and approximately **$700 thousand** for certain Company expenses[46](index=46&type=chunk) [Litigation](index=10&type=section&id=Litigation) On October 7, 2024, the Company received a derivative claim exceeding NIS 2.5 Million ($690k) against its directors and Nobul AI, alleging corporate governance issues, validity of board decisions, and legality of the Nobul BCA and cash transactions. The Company considers these claims frivolous and intends to vigorously defend itself - On October 7, 2024, the Company received a derivative claim against its directors and Nobul AI for a total amount above **NIS 2.5 Million** (approximately **$690 thousand**)[47](index=47&type=chunk) - The main claims relate to corporate governance issues, entity level control, validity of board decisions, and legality of the Nobul BCA and certain cash transactions[47](index=47&type=chunk) - The Company believes all claims in the derivative action are frivolous and strongly denies them, intending to vigorously defend itself[48](index=48&type=chunk)[49](index=49&type=chunk)