Check-Cap Pivots to AI Merger Amidst Financial Strain, Delisting Looms

Ticker: MBAI · Form: 20-F · Filed: Aug 27, 2025 · CIK: 1610590

Sentiment: bearish

Topics: Biotechnology, Medical Diagnostics, Mergers and Acquisitions, Going Concern, Delisting Risk, Cash Burn, Strategic Pivot

Related Tickers: MBAI, CHEK

TL;DR

**MBAI is a distressed asset making a Hail Mary pivot to AI via a merger, and if it fails, they're likely toast.**

AI Summary

Check-Cap Ltd. (MBAI) reported a challenging fiscal year ended December 31, 2024, marked by significant strategic shifts and financial distress. The company, a clinical-stage medical diagnostics firm, announced a substantial workforce reduction on June 6, 2023, to curb cash burn and discontinued calibration studies for its C-Scan technology. This was followed by the termination of a business combination agreement with Keystone Dental Holdings, Inc. on December 24, 2023, after failing to secure shareholder approval. Subsequently, on March 25, 2024, Check-Cap entered into a new business combination agreement with Apollo Technology Capital Corporation (Nobul AI Corp.). The company faces a history of losses and requires significant additional funding to continue operations, with management fully impairing unsecured loans to Nobul due to recoverability risks. As of August 25, 2025, Check-Cap had 5,850,906 ordinary shares outstanding, with a par value of NIS 48.00 per share. The proposed merger with Nobul, if consummated, would lead to delisting from Nasdaq and deregistration from the SEC, fundamentally altering Check-Cap's operational and regulatory landscape.

Why It Matters

This filing signals a critical juncture for Check-Cap, indicating a potential exit from public markets and a complete overhaul of its business model. For investors, the proposed merger with Nobul AI Corp. represents a speculative shift from medical diagnostics to artificial intelligence, with significant dilution and uncertainty regarding the combined entity's future. Employees have already faced substantial workforce reductions, and the ongoing strategic evaluation creates job insecurity. Customers of the C-Scan technology, if any, face discontinuation of support and development. Competitively, this move suggests Check-Cap's inability to compete effectively in the medical diagnostics space, potentially leaving a void or strengthening rivals.

Risk Assessment

Risk Level: high — The risk level is high due to Check-Cap's 'history of losses' and explicit statement that it 'may incur future losses and require additional funding.' The company also states, 'If additional capital is not available and we cease the development of our products and technology or are obligated to relinquish rights to our intellectual property, we may not ever achieve profitability and be forced to liquidate.' Furthermore, management has 'fully impair[ed]' unsecured loans to Nobul, indicating significant financial instability and recoverability risk.

Analyst Insight

Investors should exercise extreme caution and consider this a highly speculative investment. Given the history of losses, the failed Keystone merger, and the full impairment of loans to Nobul, the proposed merger with Nobul AI Corp. is a last-ditch effort. Existing shareholders should evaluate the potential for significant dilution and the fundamental shift in business focus, while new investors should avoid until a clear, profitable path for the combined entity is demonstrated.

Financial Highlights

debt To Equity
N/A
revenue
$0
operating Margin
N/A
total Assets
N/A
total Debt
N/A
net Income
N/A
eps
N/A
gross Margin
N/A
cash Position
N/A
revenue Growth
N/A

Key Numbers

Key Players & Entities

FAQ

What is Check-Cap Ltd.'s current strategic direction?

Check-Cap Ltd. is pursuing a business combination with Apollo Technology Capital Corporation (formerly Nobul AI Corp.), shifting its focus from medical diagnostics to a new, unspecified business area. This follows a significant workforce reduction on June 6, 2023, and the termination of a prior merger agreement with Keystone Dental Holdings, Inc. on December 24, 2023.

What are the financial implications of Check-Cap's recent activities?

Check-Cap has a history of losses and requires additional funding to continue operations. Management has fully impaired unsecured loans to Nobul, indicating significant recoverability risk. If the merger with Nobul is not completed, the company will need substantial capital to develop its C-Scan product or face liquidation.

What is the status of Check-Cap's C-Scan product development?

Check-Cap has discontinued calibration studies for its C-Scan technology and reduced resources on essential research activities. Efficacy results from recent studies did not meet the goal to proceed to the powered portion of the U.S. pivotal study, raising doubts about its future development.

What will happen to Check-Cap's Nasdaq listing if the Nobul merger is completed?

If the business combination with Nobul is consummated, Check-Cap's ordinary shares will be delisted from Nasdaq and deregistered under the Securities Exchange Act of 1934, meaning it will no longer be required to file periodic reports with the U.S. Securities and Exchange Commission.

Who is the interim CEO of Check-Cap Ltd.?

David Lontini is the Interim Chief Executive Officer of Check-Cap Ltd. His contact information is provided as +1 (647) 892-9516 and david@londacorp.com.

What was the outcome of the proposed merger with Keystone Dental Holdings, Inc.?

The proposed business combination with Keystone Dental Holdings, Inc. was terminated on December 24, 2023, because it did not receive the requisite majority approval from Check-Cap's shareholders under Section 320 of the Israeli Companies Law 5759-1999.

What are the primary risks for investors in Check-Cap Ltd.?

Key risks include the uncertainty of the Nobul merger's consummation, potential delisting from Nasdaq, a history of losses, the need for significant additional capital, the inability to recover loans to Nobul, and the failure of C-Scan's clinical development. There is also a legal dispute regarding unpaid rent for its Isfiya facility.

How many ordinary shares of Check-Cap Ltd. were outstanding as of August 25, 2025?

As of August 25, 2025, Check-Cap Ltd. had 5,850,906 ordinary shares outstanding, each with a par value of NIS 48.00 per share.

What accounting standards does Check-Cap Ltd. use for its financial statements?

Check-Cap Ltd. prepares its financial statements in accordance with generally accepted accounting principles in the United States of America, or U.S. GAAP.

What is the significance of the 'going concern' risk for Check-Cap Ltd.?

The 'going concern' risk means there is substantial doubt about Check-Cap's ability to continue operating without significant additional capital. If the company cannot secure funding or complete the Nobul merger, it may be forced to cease operations and liquidate its assets, leading to a complete loss for investors.

Risk Factors

Industry Context

Check-Cap operates in the medical diagnostics sector, a field characterized by high R&D costs, long development cycles, and significant regulatory hurdles. The industry is competitive, with established players and emerging technologies vying for market share. Trends include a focus on early disease detection, personalized medicine, and the integration of AI and data analytics.

Regulatory Implications

The proposed merger with Nobul AI Corp. will result in Check-Cap's delisting from Nasdaq and deregistration from the SEC. This transition will significantly reduce public disclosure requirements and investor protections associated with listed companies, fundamentally changing its regulatory landscape.

What Investors Should Do

  1. Closely monitor the progress and shareholder approval of the proposed merger with Nobul AI Corp.
  2. Assess the financial viability and funding needs of the combined entity post-merger.
  3. Evaluate the recoverability of impaired loans to Nobul and related party transaction risks.

Key Dates

Glossary

20-F
An annual report required by the U.S. Securities and Exchange Commission (SEC) for foreign private issuers. (This document provides comprehensive information about Check-Cap's business, financial condition, and risks for investors.)
Clinical-stage
Refers to a biotechnology or pharmaceutical company that is in the process of testing its drug or medical device candidates in human clinical trials. (Indicates Check-Cap's focus on developing medical diagnostics and its stage of product development, which is typically high-risk and capital-intensive.)
Business Combination Agreement (BCA)
A contract outlining the terms and conditions for merging or acquiring one company with or by another. (Key agreements that define Check-Cap's strategic direction, such as the terminated agreement with Keystone Dental and the current one with Nobul AI.)
Par Value
A nominal value assigned to a share of stock by the company's charter, often a very small amount. (The stated par value of NIS 48.00 per share for Check-Cap's ordinary shares is unusually high and may have accounting or historical implications, though it typically has little bearing on market value.)
Going Concern
A business assumption that the entity will continue to operate for the foreseeable future, typically at least 12 months. (Check-Cap's history of losses and need for funding raise substantial doubt about its ability to continue as a going concern, a critical factor for investors.)

Year-Over-Year Comparison

Information comparing key metrics to the previous year is not available in the provided text. However, the narrative indicates a challenging fiscal year for Check-Cap, marked by significant strategic shifts including workforce reductions and the termination of a prior business combination, suggesting a period of operational and financial restructuring.

Filing Stats: 4,538 words · 18 min read · ~15 pages · Grade level 13.4 · Accepted 2025-08-26 20:59:38

Key Financial Figures

Filing Documents

Item 18

Item 17 Item 18 If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No (APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS) Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of the securities under a plan confirmed by a court. Yes No TABLE OF CONTENTS Page Part I 1 Item 1. Identity of Directors, Senior Management and Advisers 1 A. Directors and Senior Management 1 B. Advisers 1 C. Auditors 1 Item 2. Offer Statistics and Expected Timetable 1 Item 3. Key Information 1 A. [Reserved.] 1 B. Capitalization and Indebtedness 1 C. Reasons for the Offer and Use of Proceeds 1 D.

Risk factors

Risk factors 1 Item 4. Information On Our Company 36 A. History and Development of the Company Our History 36 B.

Business

Business 37 C. Organizational Structure 71 D. Property, Plants and Equipment 71 Item 4A. Unresolved Staff Comments 71 Item 5. Operating and Financial Review and Prospects 72 A. Operating Results 74 B. Liquidity and Capital Resources 79 C. Research and development, patents and licenses, etc. 85 D. Trend Information 85 E. Critical Accounting Estimates 85 i Item 6. Directors, Senior Management and Employees 87 A. Directors and senior management 87 B. Compensation of Directors and Executive Officers 88 C. Board Practices 89 D. Employees 99 E. Share Ownership 100 F. Disclosure of a registrant's action to recover erroneously awarded compensation. 104 Item 7. Major Shareholders and Related Party Transactions 104 A. Major shareholders 104 B. Related Party Transactions 105 C. Interests of Experts and Counsel 106 Item 8. Financial Information 106 A. Consolidated Statements and Other Financial Information. 106 B. Significant Changes 107 Item 9. The Offer and Listing 107 A. Offer and Listing Details 107 B. Plan of Distribution 107 C. Markets for Ordinary Shares 107 D. Selling Shareholders 107 E.

Dilution

Dilution 108 F. Expenses of the Issue 108 Item 10. Additional Information 108 A. Share Capital 108 B. Memorandum and Articles of Association 108 C. Material Contracts 109 D. Exchange controls 111 E. Taxation 111 F. Dividends and paying agents 126 G. 126 H. Documents on display 126 I. Subsidiary Information 126 J. Annual Report to Security Holders 126 Item 11. Quantitative and Qualitative Disclosure About Market Risk 126 Item 12.

Description of Securities Other Than Equity Securities

Description of Securities Other Than Equity Securities 126 ii Part II 127 Item 13. Defaults, Dividend Arrearages and Delinquencies 127 Item 14. Material Modifications to The Rights of Security Holders and Use of Proceeds 127 Item 15.

Controls and Procedures

Controls and Procedures 127 Item 16. [Reserved] 127 Item 16A. Audit Committee Financial Expert. 127 Item 16B. Code of Ethics. 128 Item 16C. Principal Accountant Fees and Services. 128 Item 16D. Exemptions From The Listing Standards for Audit Committees. 129 Item 16E. Purchases of Equity Securities By The Issuer and Affiliated Purchasers. 129 Item 16F. Change in Registrant's Certifying Accountant. 129 Item 16G. Corporate Governance. 130 Item 16H. Mine Safety Disclosure. 131 Item 16I. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections. 131 Item 16J. Insider Trading Policies. 131 Item 16K. Cybersecurity. 131 Part III 133 Item 17.

Financial Statements

Financial Statements 133 Item 18.

Financial Statements

Financial Statements 133 Item 19. Exhibits 133

Signatures

Signatures 136 iii EXPLANATORY NOTE Check-Cap Ltd. ("Check-Cap", the "Company" or "we") is a clinical stage medical diagnostics company with a limited operating history. On June 6, 2023, we announced that after further review of additional data and interaction with the Food and Drug Administration on a revised pivotal study protocol together with the anticipated time and investment necessary to further develop the technology, we were reducing our workforce significantly to reduce cash burn, concentrating our resources on essential research activities, discontinuing our calibration studies, and evaluating and pursuing strategic options. As a result of our evaluation and pursuit of strategic options, on August 16, 2023, we entered into a business combination agreement (the "Keystone BCA") with Keystone Dental Holdings, Inc. ("Keystone"), Capstone Dental PubCo, Inc ("PubCo") and other direct, wholly owned subsidiaries of PubCo. At our 2023 annual general meeting of shareholders, such business combination transactions did not receive the requisite majority required for approval under Section 320 of the Israeli Companies Law 5759-1999. On December 24, 2023, we received a notice on behalf of Keystone, terminating the Keystone BCA in light of the results. On March 25, 2024, we entered into a business combination agreement with Apollo Technology Capital Corporation (formerly known as Nobul AI Corp.) ("Nobul"), a private Ontario corporation (the "Business Combination"). If the Business Combination is consummated, Check-Cap's ordinary shares will be delisted from Nasdaq and deregistered under the Securities Exchange Act of 1934, as amended, and Check-Cap will no longer be required to file periodic reports with the U.S. Securities and Exchange Commission. Given that this Annual Report on Form 20-F provides the financial statements for the fiscal years ended December 31, 2024, 2023, and 2022, we have elected to discuss the significant aspects of our historical business as

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This Annual Report contains forward-looking statements about our expectations, beliefs or intentions regarding, among other things, our plans with respect to the our evaluation and pursuit of strategic options including the transactions contemplated by our Business Combination Agreement with Nobul, our ongoing and planned product development and clinical trials and lack thereof; the timing of, and our ability to make, regulatory filings and obtain and maintain regulatory approvals for our product candidates; our intellectual property position; the degree of clinical utility of our products, particularly in specific patient populations; our ability to develop commercial functions; expectations regarding product launch and revenue; our results of operations; cash needs; financial condition, liquidity, prospects, growth and strategies; the industry in which we operate; and the trends that may affect the industry or us. In addition, from time to time, we or our representatives have made or may make forward-looking statements, orally or in writing. Forward-looking statements can be identified by the use of forward-looking words such as "believe," "expect," "intend," "plan," "may," "should" or "anticipate" or their negatives or other variations of these words or other comparable words or by the fact that these to, various filings made by us with the U.S. Securities and Exchange Commission, or the SEC, press releases or oral statements made by or with the approval of one of our authorized executive officers. Forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual

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