Check-Cap Ltd. (NASDAQ: CHEK) drops 5% After Announcing $35 Million Registered Direct Offering

Check-Cap Ltd. (NASDAQ: CHEK) dropped 5% after announcing the signing of definitive agreements with various accredited and institutional investors for a $35 million registered direct offering. 

Check-Cap to offer 25 million common shares in direct offering 

The agreement is for the sale and purchase of 25,925,926 Check-Cap common shares plus short-term warrants for the purchase of a total of 25,025,926 shares of the company’s ordinary stock in the direct offering. The company will sell each common share tied to a short-term warrant to acquire one common share of the company at a combined price of $1.35 per common share and related warrant. 

The short-term warrants accompanying the shares have two and one-half term years from the date of issuance. They have an option of immediate exercise at $1.5 per common share. The company expects the registered direct offering to close around July 2, 2021, once all customary closing conditions have been satisfied. 

Check-Cap to use net proceeds from offering to fund C-Scab development 

Check-Cap will receive gross proceeds of $35 million before accounting for offering expenses and subtracting placement agent fees. Equally, the proceeds don’t include any proceeds that will be realized once the underwriter exercises the warrant option to acquire Check-Cap common shares. As a result, once the warrants are fully exercised, the company expects to generate an additional $38.9 million in gross proceeds mine placement fees as will be applicable. 

The company will use net proceeds from the registered direct offering to advance its current clinical development of C-Scan, which includes the Check-Cap’s US pivotal study and corporate purposes.  C-Scan is a patient-friendly and first preparation-free screening test that promises to revolutionize colorectal cancer screening to detect polyps before becoming colorectal cancer. 

Leave a Comment

Your email address will not be published.