Check-Cap Ltd Annual Report: A Simple Breakdown

I’ve put together this guide to help you understand Check-Cap’s performance this year. My goal is to turn complex filing data into clear information so you can decide if this company fits your investment goals.

1. What does this company do?

Check-Cap is no longer a medical diagnostics company. After struggling to launch its C-Scan colorectal cancer screening system, the company stopped all clinical development, cut its staff, and halted research to preserve cash. Check-Cap is currently operating as a shell company focused on completing a merger with MBody AI Inc.

2. Financial performance

The company generates negligible revenue from its legacy medical technology. It is currently in "preservation mode," utilizing its remaining cash reserves primarily to cover the legal and administrative expenses required to maintain its stock exchange listing. The company has a consistent history of operating losses, which continues as it winds down its former business activities.

3. Major wins and challenges

• The Big Pivot: The company’s primary objective is the merger with MBody AI. If successful, the business will transition from medical devices to the "Ghost Kitchen" industry, which focuses on delivery-only restaurant operations.
• Past Hurdles: A previous attempt to merge with Keystone Dental was rejected by shareholders, highlighting the complexity the board has faced in securing a path forward.
• Symbol Change: In December 2025, the ticker changed from "CHEK" to "MBAI" to reflect the shift toward the MBody AI business model.

4. Financial health

Check-Cap’s financial stability is fragile. Its survival is tied to the recovery of $16.3 million previously lent to a partner, Apollo. The company expects to collect these funds only if the MBody AI merger closes. If the deal fails, the loss of these funds could threaten the company’s ability to continue operations.

5. Key risks

• Merger Uncertainty: There is no guarantee the MBody AI merger will be completed. If it fails, the company will likely face an immediate need for capital to fund basic operations, which may be difficult given its lack of current income.
• Dilution: If the merger proceeds, current Check-Cap shareholders will own approximately 10% of the new entity, while MBody AI owners will hold 90%. This will result in a significant reduction in your ownership percentage.
• Reverse Stock Split: The company maintains the authority to perform a reverse stock split to satisfy Nasdaq listing requirements. While this increases the price per share, it does not change the underlying value or financial health of the company.
• Operational Costs: The company continues to incur substantial legal and advisory fees related to the proposed merger. These expenses deplete remaining cash reserves regardless of the final outcome of the deal.

Final Thought for Investors: Check-Cap is currently a high-risk transition play. Your investment is essentially a bet on the successful completion of the MBody AI merger. Before deciding, consider whether you are comfortable with the high probability of dilution and the significant risk that the company may lack the capital to survive if the merger does not close.