CHEK Stock Price Falls Over 10%: Why It Happened

By Amit Chowdhry ● Jun 30, 2021
  • The stock price of Check Cap Ltd (NASDAQ: CHEK) fell by over 10% during intraday trading. This is why it happened.

The stock price of Check Cap Ltd (NASDAQ: CHEK) – a clinical-stage medical diagnostics company advancing the development of C-Scan, the first and only patient-friendly, preparation-free screening test, to detect polyps before they may transform into colorectal cancer (CRC) – fell by over 10% during intraday trading. Investors are responding negatively to Check-Cap announcing that it has entered into definitive agreements with several institutional and accredited investors for the purchase and sale of 25,925,926 of the Company’s ordinary shares and accompanying short-term warrants to purchase up to an aggregate of 25,925,926 of the company’s ordinary shares in a registered direct offering. 

Each ordinary share is being sold together with one short-term warrant to buy one ordinary share at a combined offering price of $1.35 per ordinary share and accompanying warrant. And the short-term warrants will have a term of 2.5 years following the date of issuance, be exercisable immediately and have an exercise price of $1.50 per ordinary share. The registered direct offering is expected to close on or about July 2, 2021, subject to customary closing conditions.

The gross proceeds to Check-Cap from this offering – before deducting the placement agent’s fees and other offering expenses and excluding any proceeds that may be received upon exercise of the warrants to buy ordinary shares – are expected to be approximately $35 million. And the full exercise of the warrants would generate additional gross proceeds of approximately $38.9 million to Check-Cap, less placement agent’s fees, if any.

Check-Cap plans to use the net proceeds from this offering to advance the ongoing clinical development of C-Scan, including the Company’s U.S. pivotal study, and for general corporate purposes.

H.C. Wainwright is acting as the exclusive placement agent for the offering.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.