Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For August 2023

Commission File No. 001-36848

Check-Cap Ltd.

Check-Cap Building

Abba Hushi Avenue

P.O. Box 1271

Isfiya, 30090

Mount Carmel, Israel

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES.)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

This Form 6-K (including the text under the heading “Financial Results for the Second Quarter Ended June 30, 2023,” “Financial Results for the Six Months Ended June 30, 2023,” the accompanying financial statements, and “Legal Notice Regarding Forward-Looking Statements” in Exhibit 99.1 and Exhibit 99.2) being incorporated by reference into the Post-Effective Amendment No. 1 to the Form S-8 Registration Statement File No. 333-203384, Form S-8 Registration Statement File Nos. 333-226490 and 333-259666, and into the Form F-3 Registration Statements File Nos. 333-211065, 333-225789 and 333-262401.

Other Information

On August 4, 2023, Check-Cap Ltd. (the “Company”, “we”, or “us”) issued a press release announcing its financial results for the second quarter of 2023. In addition, the Company released its consolidated unaudited financial statements as of June 30, 2023.

A copy of both the press release and consolidated unaudited financial statements as of June 30, 2023 are attached hereto as Exhibits 99.1 and 99.2 are incorporated herein by reference.

Risk Factors

Any investment in our business involves a high degree of risk. Before making an investment decision, you should carefully consider the information we include in this Report on Form 6-K, including our unaudited consolidated financial statements and accompanying notes, and the additional information in the other reports we file with the Securities and Exchange Commission along with the risks described in our Annual Report on Form 20-F for the fiscal year ended December 31, 2022. These risks may result in material harm to our business and our financial condition and results of operations. In this event, the market price of our ordinary shares may decline and you could lose part or all of your investment. We have described below those risks that reflect substantive changes from, or additions to, the risks described in our Annual Report on Form 20-F for the fiscal year ended December 31, 2022.

Our exploration of strategic alternatives may not result in entering into or completing a transaction, and the process of reviewing strategic alternatives or its conclusion could adversely affect our share price.

We initiated a process to review strategic alternatives with the goal of maximizing shareholder value. Potential strategic alternatives to be explored and evaluated during the review process may include the sale of all or part of the Company, licensing, merger or reverse merger. We are actively working with an investment bank in this assessment process. As previously reported, the most recent efficacy results from the Company’s calibration studies did not meet the goal in order to proceed to the powered portion of the U.S. pivotal study. After further review of additional data and interaction with the FDA on a revised pivotal study protocol together with the anticipated time and investment necessary to further develop the technology, the Company’s board of directors determined that it is appropriate to pursue strategic options. In addition, the Company is implementing a reduction in its workforce by approximately 90 percent, it has discontinued the calibration studies and does not plan on commencing the powered portion of its U.S. pivotal study, and is concentrating its resources on its essential research activities and strategic alternatives.

There can be no assurance any transaction will result from the Company’s evaluation of strategic alternatives. Any potential transaction would be dependent on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the interest of third parties in a potential transaction with us, and obtaining shareholder approval. The process of reviewing strategic alternatives may be time consuming and may involve the dedication of significant resources and may require us to incur significant costs and expenses. It could negatively impact our ability to attract, retain and motivate key employees, and expose us to potential litigation in connection with this process or any resulting transaction. If we are unable to effectively manage the process, our financial condition and results of operations could be adversely affected. In addition, speculation regarding any developments related to the review of strategic alternatives and perceived uncertainties related to the future of our company could cause our share price to fluctuate significantly. Further, any strategic alternative that may be pursued and completed ultimately may not deliver the anticipated benefits or enhance shareholder value. There can be no guarantee that the process of evaluating strategic alternatives will result in our company entering into or completing a potential transaction within the anticipated timing or at all.

If we do not successfully complete a strategic transaction, our board of directors may decide to pursue a dissolution and liquidation of our company. In such an event, the amount of cash available for distribution to our shareholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

There can be no guarantee that the process to identify a strategic transaction will result in a successfully completed transaction. If no transaction is completed, our board of directors may decide that it is in the best interest of our shareholders to dissolve our company and liquidate our assets. In that event, the amount of cash available for distribution to our shareholders will depend heavily on the timing of such decision and, ultimately, such liquidation, since the amount of cash available for distribution continues to decrease as we fund our operations and evaluate our strategic alternatives. In addition, we may be subject to litigation or other claims related to a dissolution and liquidation of our company. Accordingly, holders of our ordinary shares could lose all or a significant portion of their investment in the event of a dissolution, liquidation or winding up of our company.

We are substantially dependent on our remaining employees to facilitate the consummation of a strategic transaction. We could lose such key employees.

As part of our cash conservation activities, we are implementing a 90% reduction in workforce plan. Our ability to successfully complete a strategic transaction depends in large part on our ability to retain certain personnel, particularly Alex Ovadia, our Chief Executive Officer, and Mira Rosenzweig, our Chief Financial Officer. Despite our efforts to retain these employees, one or more may terminate their employment on short notice. The loss of the services of any of these employees could potentially harm our ability to evaluate and pursue strategic alternatives, run our day-to-day business operations as well as fulfill our reporting obligations as a public company.

Exhibit

Exhibit No.		Description

99.1		Press Release, dated August 4, 2023

99.2		Consolidated Unaudited Financial Statements as of June 30, 2023

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Check-Cap Ltd.

	By:	/s/ Alex Ovadia
		Name: Alex Ovadia
Date: August 4, 2023		Title: Chief Executive Officer

Exhibit 99.1

Check-Cap Reports Second Quarter 2023 Financial Results

ISFIYA, Israel, August 4, 2023 -- Check-Cap Ltd. (the "Company" or "Check-Cap") (NASDAQ: CHEK), today announced financial results for the second quarter and six months ended June 30, 2023.

Financial Results for the Second Quarter Ended June 30, 2023

Research and development expenses, net, were $4.5 million for the three months ended June 30, 2023, compared to $3.5 million for the same period in 2022, an increase of $1.0 million. The increase is primarily due to (i) an increase of approximately $0.4 million in materials and subcontractors, mainly associated with the termination of clinical studies and operations, (ii) an increase of approximately $0.3 million mainly due to termination expenses on account of prior notice period to employees and employee retention costs, and (iii) an increase of approximately $0.2 million in other research and development expenses, including clinical related expenses and regulatory consultants.

General and administrative expenses were $1.6 million for the three months ended June 30, 2023, compared to $1.3 million for the same period in 2022, an increase of $0.3 million. The increase is primarily due to (i) an increase of approximately $0.2 million in salary and related expenses, mainly due to termination expenses on account of prior notice period to employees and employee retention costs and (ii) an increase of approximately $0.4 million in professional services, offset in part as a result of a reduction in share-based compensation of $0.1 million and a $0.2 million decrease in other general expenses, mainly associated with directors’ and officers’ liability insurance.

Impairment of fixed assets was $1.4 million for the three months ended June 30, 2023. Due to the changes in circumstances that indicate that the carrying amount of an asset may not be recoverable, the Company reviewed its long-lived assets for impairment in accordance with ASC 360-10 "Accounting for the Impairment or Disposal of Long-Lived Assets". Therefore, the Company recorded an impairment loss of $1.4 million.

Operating loss was $7.4 million for the three months ended June 30, 2023, compared to an operating loss of $4.9 million for the same period in 2022.

Finance income, net, was approximately $0.5 million for the three months ended June 30, 2023, compared to $0.1 million for the same period in 2022, an increase of approximately $0.4 million. The increase in finance income, net is primarily due to an increase in interest income on short-term deposits of $0.3 million as compared to the three months ended June 30, 2022 and $0.1 million for exchange rate differences.

Net loss was $6.9 million for the three months ended June 30, 2023, compared to $4.8 million for the same period in 2022.

Cash and cash equivalents, restricted cash and short-term bank deposits as of June 30, 2023 were $32.4 million, compared to $37.4 million as of March 31, 2023 and $42.1 million as of December 31, 2022.

The number of outstanding ordinary shares as of June 30, 2023 was 5,849,216.

Financial Results for the Six Months Ended June 30, 2023

Research and development expenses, net, were $8.2 million for the six months ended June 30, 2023, compared to $7.7 million for the same period in 2022, an increase of $0.5 million. The increase is primarily due to (i) an increase of approximately $0.4 million in materials and subcontractors, mainly associated with the termination of clinical studies and operations (ii) an increase of approximately $0.4 million in other research and development expenses, including clinical related expenses and regulatory consultants. The increase in expenses was offset in part by a decrease in salary and related expenses of $0.1 million mainly as a result of a reduction in bonus expenses and currency exchange rate fluctuation as compared to the same period in 2022, net of termination expenses on account of prior notice period to employees and employee retention costs and by $0.1 million decrease in share-based compensation.

General and administrative expenses were $2.8 million for the six months ended June 30, 2023, compared to $3.1 million for the same period in 2022 a decrease of $0.3 million. The decrease is primarily due to a $0.3 million decrease in general expenses and (ii) a decrease of $0.2 million in share-based compensation. The decrease in expenses was offset in part by an increase in salary and related expenses of $0.1 million mainly due to employee retention costs and termination expenses on account of prior notice period, offset in part by a reduction in bonus expenses and currency exchange rate fluctuation as compared to the same period in 2022.

Impairment of fixed assets was $1.4 million for the six months ended June 30, 2023.

Operating loss was $12.3 million for the six months ended June 30, 2023, compared to $10.8 million for the same period in 2022.

Net finance income was $1.0 million for the six months ended June 30, 2023, compared to $0.1 million for the same period in 2022. The increase in finance income, net is primarily due to an increase in interest income on short-term deposits of $0.7 million as compared to the second quarter of 2022 and $0.1 million for exchange rate differences.

Net loss was $11.3 million for the six months ended June 30, 2023, compared to $10.6 million for the same period in 2022.

Net cash used in operating activities was $9.8 million for the six months ended June 30, 2023, compared to $10.3 million for the same period in 2022.

About Check-Cap

Check-Cap is a clinical stage medical diagnostics company aiming to redefine colorectal cancer (CRC) screening through the introduction of C-Scan®, the first and only patient-friendly preparation-free screening test to detect polyps before they may transform into colorectal cancer and enable early intervention and cancer prevention. The Company’s disruptive capsule-based screening technology aims to help millions of people to stay healthy through preventive CRC screening. C-Scan uses an ultra-low dose X-ray capsule, an integrated positioning, control and recording system, as well as proprietary software to generate a 3D map of the inner lining of the colon as it travels naturally along the gastrointestinal tract. C-Scan is non-invasive and requires no sedation. It requires no bowel preparation, allowing the patients to continue their daily routine with no interruption. C-Scan is not intended to replace colonoscopy. A positive C-Scan result should be followed by colonoscopy. C-Scan is an investigational device and is not available for sale in the United States.

Legal Notice Regarding Forward-Looking Statements

This press release contains "forward-looking statements" about the Company’s expectations, beliefs or intentions regarding, among other things, its product development efforts, business, financial condition, results of operations, strategies or prospects. Words such as "may," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," and similar expressions, as well as statements in future tense, often signify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and may not be accurate indications of when such performance or results will be achieved. Forward-looking statements are based on information that the Company has when those statements are made or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. For a discussion of these and other risks that could cause such differences and that may affect the realization of forward-looking statements, please refer to the "Forward-looking Statements" and "Risk Factors" in the Company's Annual Report on Form 20-F for the year ended December 31, 2022 and other filings with the Securities and Exchange Commission (SEC). Investors and security holders are urged to read these documents free of charge on the SEC's web site at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise

Investor Contacts

Irina Koffler
LifeSci Advisors, LLC
646.970.4681
ikoffler@lifesciadvisors.com

Meirav Gomeh-Bauer
LifeSci Advisors, LLC
+972(0)-54-476-4979
Meirav@lifesciadvisors.com

Media Contact

Mónica Rouco Molina
Account Supervisor - Europe
LifeSci Communications
mroucomolina@lifescicomms.com

CHECK CAP LTD

CONSOLIDATED UNAUDITED BALANCE SHEETS

(U.S. dollars in thousands, except share and per share data)

	June 30,			December 31,
	2023			2022
	Unaudited			Audited
Assets

Current assets
Cash and cash equivalents	$	2,254		$	4,090
Restricted cash		350			352
Short-term bank deposit		29,815			37,609
Prepaid expenses and other current assets		838			579
Total current assets		33,257			42,630

Non-current assets
Property and equipment, net		245			1,751
Operating leases		223			1,060
Total non-current assets		468			2,811
Total assets	$	33,725		$	45,441

Liabilities and shareholders' equity

Current liabilities
Accounts payable and accruals
Trade	$	783		$	952
Other		675			802
Employees and payroll accruals		1,946			1,261
Other current liabilities		48			56
Operating lease liabilities		83			337
Total current liabilities		3,535			3,408

Non-current liabilities
Royalties provision		-			94
Operating lease liabilities		-			627
Total non-current liabilities		-			721

Shareholders' equity
Share capital, Ordinary shares, 48 NIS par value (18,000,000 authorized shares as of June 30, 2023 and December
31, 2022, respectively; 5,849,216 and 5,844,463 shares issued and outstanding as of June 30, 2023 and December
31, 2022, respectively) (1)		83,728			83,664
Additional paid-in capital		85,075			84,941
Accumulated deficit		(138,613	)		(127,293	)
Total shareholders' equity		30,190			41,312

Total liabilities and shareholders' equity	$	33,725		$	45,441

CHECK CAP LTD

CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except share and per share data)

	Six months ended June 30,				Three months ended June 30,
	2023		2022		2023		2022

Research and development expenses, net	$	8,151	$	7,673	$	4,480	$	3,545
General and administrative expenses		2,762		3,100		1,583		1,343
Impairment of fixed assets		1,364		-		1,364		-
Operating loss		12,277		10,773		7,427		4,888

Finance Income , net		957		132		549		81
Loss before income tax		11,320		10,641		6,878		4,807

Net loss for the period	$	11,320	$	10,641	$	6,878	$	4,807
Loss per share:
Net loss per ordinary share basic and diluted	$	1.94	$	1.94	$	1.18	$	0.82

Weighted average number of ordinary shares outstanding - basic and diluted		5,847,392		5,497,548		5,848,565		5,840,089

CHECK CAP LTD.

CONSOLIDATED UNAUDITED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(U.S. dollars in thousands, except share and per share data)

	Number of				Additional						Total
	Ordinary				paid-in			Accumulated			shareholders'
	Shares (1)		Amount		capital			deficit			equity

Balance as of January 1, 2023		5,844,463	$	83,664	$	84,941		$	(127,293	)	$	41,312
Share-based compensation		-		-		156			-			156
Net loss		-		-		-			(4,442	)		(4,442	)
RSUs vesting		3,375		46		(46	)		-			-
Balance as of March 31, 2023		5,847,838	$	83,710	$	85,051		$	(131,735	)	$	37,026
Share-based compensation		-		-		42			-			42
RSUs vesting		1,378		18		(18	)		-			-
Net loss		-		-		-			(6,878	)		(6,878	)
Balance as of June 30, 2023		5,849,216	$	83,728	$	85,075		$	(138,613	)	$	30,190

Balance as of January 1, 2022	4,840,089	$	68,787	$	90,089		$	(108,185	)	$	50,691
Issuance of ordinary shares and warrants in March 2022 registered direct offerings, net of issuance expenses in an amount
of $1,150	1,000,000		14,815		(5,965	)		-			8,850
Share-based compensation	-		-		250			-			250
Net loss	-		-		-			(5,834	)		(5,834	)
Balance as of March 31, 2022	5,840,089	$	83,602	$	84,374		$	(114,019	)	$	53,957
Share-based compensation	-		-		274			-			274
Net loss	-		-		-			(4,807	)		(4,807	)
Balance as of June 30, 2022	5,840,089	$	83,602	$	84,648		$	(118,826	)	$	49,424

CHECK-CAP LTD.

CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands, except share and per share data)

	Six months ended
	June 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(11,320	)	$	(10,641	)
Adjustments required to reconcile net loss to net cash used in operating activities:
Depreciation		190			159
Impairment of fixed assets		1,364			-
Share-based compensation		198			525
Financial income, net		(323	)		(239	)
Changes in assets and liabilities items:
Increase in prepaid and other current assets and non-current assets		(255	)		(152	)
Increase (decrease) in trade accounts payable, accruals and other current liabilities		(270	)		320
Increase (decrease) in employees and payroll accruals		686			(293	)
Decrease in royalties provision		(94	)		(25	)
Net cash used in operating activities	$	(9,824	)	$	(10,346	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(83	)		(323	)
Changes in short-term deposits		8,069			(13,000	)
Net cash provided by (used in) investing activities	$	7,986		$	(13,323	)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of ordinary shares in the registered direct offerings, net of issuance expenses		-			8,850
Net cash provided by financing activities	$	-		$	8,850

Net increase in cash, cash equivalents and restricted cash		(1,838	)		(14,819	)
Cash, cash equivalents and restricted cash at the beginning of the period		4,442			26,807
Cash, cash equivalents and restricted cash at the end of the period	$	2,604		$	11,988

Exhibit 99.2

CHECK CAP LTD.

CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

AS OF JUNE 30, 2023

CHECK CAP LTD.

CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS AS OF JUNE 30, 2023

Table of Contents

	Page

Financial Statements:

Consolidated Unaudited Balance Sheets	3

Consolidated Unaudited Statements of Comprehensive Loss	4

Consolidated Unaudited Statements of Changes in Shareholders Equity	5

Consolidated Unaudited Statements of Cash Flows	6-7

Notes to Consolidated Unaudited Financial Statements	8-12

CHECK CAP LTD

CONSOLIDATED UNAUDITED BALANCE SHEETS

(U.S. dollars in thousands, except share and per share data)

	June 30,			December 31,
	2023			2022
	Unaudited			Audited
Assets

Current assets
Cash and cash equivalents	$	2,254		$	4,090
Restricted cash		350			352
Short-term bank deposit		29,815			37,609
Prepaid expenses and other current assets		838			579
Total current assets		33,257			42,630

Non-current assets
Property and equipment, net		245			1,751
Operating leases		223			1,060
Total non-current assets		468			2,811
Total assets	$	33,725		$	45,441

Liabilities and shareholders' equity

Current liabilities
Accounts payable and accruals
Trade	$	783		$	952
Other		675			802
Employees and payroll accruals		1,946			1,261
Other current liabilities		48			56
Operating lease liabilities		83			337
Total current liabilities		3,535			3,408

Non-current liabilities
Royalties provision		-			94
Operating lease liabilities		-			627
Total non-current liabilities		-			721

Shareholders' equity
Share capital, Ordinary shares, 48 NIS par value (18,000,000 authorized shares as of June 30, 2023 and December
31, 2022, respectively; 5,849,216 and 5,844,463 shares issued and outstanding as of June 30, 2023 and December
31, 2022, respectively) (1)		83,728			83,664
Additional paid-in capital		85,075			84,941
Accumulated deficit		(138,613	)		(127,293	)
Total shareholders' equity		30,190			41,312

Total liabilities and shareholders' equity	$	33,725		$	45,441

(1) All share amounts have been retroactively adjusted to reflect a 1-for-20 reverse share split.

The accompanying notes to the consolidated unaudited financial statements are an integral part of them.

CHECK CAP LTD

CONSOLIDATED UNAUDITED STATEMENTS OF COMPREHENSIVE LOSS

(U.S. dollars in thousands, except share and per share data)

	Six months ended June 30,				Three months ended June 30,
	2023		2022		2023		2022

Research and development expenses, net	$	8,151	$	7,673	$	4,480	$	3,545
General and administrative expenses		2,762		3,100		1,583		1,343
Impairment of fixed assets		1,364		-		1,364		-
Operating loss		12,277		10,773		7,427		4,888

Finance Income, net		957		132		549		81
Loss before income tax		11,320		10,641		6,878		4,807

Net loss for the period	$	11,320	$	10,641	$	6,878	$	4,807
Loss per share:
Net loss per ordinary share basic and diluted	$	1.94	$	1.94	$	1.18	$	0.82

Weighted average number of ordinary shares outstanding - basic and diluted		5,847,392		5,497,548		5,848,565		5,840,089

The accompanying notes to the consolidated unaudited financial statements are an integral part of them.

CHECK CAP LTD.

CONSOLIDATED UNAUDITED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(U.S. dollars in thousands, except share and per share data)

	Number of				Additional						Total
	Ordinary				paid-in			Accumulated			shareholders'
	Shares (1)		Amount		capital			deficit			equity

Balance as of January 1, 2023		5,844,463	$	83,664	$	84,941		$	(127,293	)	$	41,312
Share-based compensation		-		-		156			-			156
Net loss		-		-		-			(4,442	)		(4,442	)
RSUs vesting		3,375		46		(46	)		-			-
Balance as of March 31, 2023		5,847,838	$	83,710	$	85,051		$	(131,735	)	$	37,026
Share-based compensation		-		-		42			-			42
RSUs vesting		1,378		18		(18	)		-			-
Net loss		-		-		-			(6,878	)		(6,878	)
Balance as of June 30, 2023		5,849,216	$	83,728	$	85,075		$	(138,613	)	$	30,190

Balance as of January 1, 2022		4,840,089	$	68,787	$	90,089		$	(108,185	)	$	50,691
Issuance of ordinary shares and warrants in March 2022 registered direct offerings, net of issuance expenses in an amount of $1,150		1,000,000		14,815		(5,965	)		-			8,850
Share-based compensation		-		-		250			-			250
Net loss		-		-		-			(5,834	)		(5,834	)
Balance as of March 31, 2022		5,840,089	$	83,602	$	84,374		$	(114,019	)	$	53,957
Share-based compensation		-		-		274			-			274
Net loss		-		-		-			(4,807	)		(4,807	)
Balance as of June 30, 2022		5,840,089	$	83,602	$	84,648		$	(118,826	)	$	49,424

(1) All share amounts have been retroactively adjusted to reflect a 1-for-20 reverse share split

The accompanying notes to the consolidated unaudited financial statements are an integral part of them.

CHECK-CAP LTD.

CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands, except share and per share data)

	Six months ended
	June 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(11,320	)	$	(10,641	)
Adjustments required to reconcile net loss to net cash used in operating activities:
Depreciation		190			159
Impairment of fixed assets		1,364			-
Share-based compensation		198			525
Financial income, net		(323	)		(239	)
Changes in assets and liabilities items:
Increase in prepaid and other current assets and non-current assets		(255	)		(152	)
Increase (decrease) in trade accounts payable, accruals and other current liabilities		(270	)		320
Increase (decrease) in employees and payroll accruals		686			(293	)
Decrease in royalties provision		(94	)		(25	)
Net cash used in operating activities	$	(9,824	)	$	(10,346	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(83	)		(323	)
Changes in short-term deposits		8,069			(13,000	)
Net cash provided by (used in) investing activities	$	7,986		$	(13,323	)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of ordinary shares in the registered direct offerings, net of issuance expenses		-			8,850
Net cash provided by financing activities	$	-		$	8,850

Net increase in cash, cash equivalents and restricted cash		(1,838	)		(14,819	)
Cash, cash equivalents and restricted cash at the beginning of the period		4,442			26,807
Cash, cash equivalents and restricted cash at the end of the period	$	2,604		$	11,988

The accompanying notes to the consolidated unaudited financial statements are an integral part of them.

CHECK-CAP LTD.

CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands, except share and per share data)

Supplemental information for Cash Flow:

	Six months ended June 30,
	2023		2022
Supplemental disclosure of non-cash flow information
Purchase of property and equipment included in accounts payable and accrued expenses		-		38
Assets acquired under operating lease		136		167

Supplemental disclosure of cash flow information:
Cash paid for taxes	2	3
Interest received	654	138

The accompanying notes to the consolidated unaudited financial statements are an integral part of them.

CHECK CAP LTD

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

(U.S. dollars in thousands, except share and per share data)

NOTE 1 - GENERAL INFORMATION

General

(1)

Check-Cap Ltd. (the “Company") was incorporated under the laws of the State of Israel. The registered address of its offices is 29 Abba Hushi Avenue, Isfiya 3009000, Israel.

(2)

The Company has a wholly-owned subsidiary, Check-Cap US, Inc., that was incorporated under the laws of the State of Delaware on May 15, 2015.

(3)

The Company is a clinical stage medical diagnostics company that aimed to redefine colorectal cancer (CRC) screening through the introduction of C-Scan®, the first and only patient-friendly preparation-free screening test to detect polyps before they may transform into colorectal cancer and enable early intervention and cancer prevention.

On March 21, 2023, the Company announced that following the Company’s internal assessment of the clinical data collected until such date from its calibration studies, the Company has determined that the most recent efficacy results from the Company’s calibration studies did not meet the goal in order to proceed to the powered portion of the U.S. pivotal study.

The Company further announced that it had adopted a plan of actions that included conducting additional clinical data analysis and approaching the U.S. Food and Drug Administration (“FDA”) to make amendments to the U.S. pivotal study and that the Company is also implementing a cost reduction plan in order to extend its cash runway, and that the initiation of the powered portion of the U.S. pivotal study that was expected in mid-2023 is therefore temporarily postponed.

On June 6, 2023, the Company announced that after further review of additional data and interaction with the FDA on a revised pivotal study protocol together with the anticipated time and investment necessary to further develop the technology, the Company’s Board of Directors has determined that it is appropriate to pursue strategic options.

In addition, the Company’s Board of Directors approved a reduction in its workforce by approximately 90 percent, to reduce the Company’s cash burn, after which the Company expects to have eight remaining employees. In light of these developments, the Company discontinued the calibration studies and does not plan on commencing the powered portion of its U.S. pivotal study and plans to concentrate its resources on its essential research activities and strategic alternatives.

As a result, the Company recorded a provision in connection with the termination expenses of the employment of Company employees for the employment period following the balance sheet date in the amount of $611 and retention costs for the remaining employees in the amount of $217.

(4)

On February 24, 2015, the Company consummated an Initial Public Offering in the United States concurrently with a private placement.

On August 11, 2016, the Company consummated a registered direct offering of ordinary shares and pre-funded warrants.

On June 2, 2017, the Company consummated a registered direct offering of ordinary shares and a simultaneous private placement of warrants.

On November 22, 2017, the Company consummated a registered direct offering of ordinary shares and a simultaneous private placement of warrants.

On May 8, 2018, the Company consummated an underwritten public offering of ordinary shares, pre-funded warrants and Series C warrants.

CHECK CAP LTD

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(U.S. dollars in thousands, except share and per share data)

NOTE 1 - GENERAL INFORMATION

General

On February 6, 2019, the Company consummated a registered direct offering of ordinary shares and warrants.

In February 2020, the Company consummated a private placement of ordinary shares.

During April and May 2020, the Company consummated three registered direct offerings of ordinary shares and simultaneous private placements of warrants.

On July 27, 2020, the Company consummated a warrant exercise transaction to purchase ordinary shares and a simultaneous private placement of warrants.

During the first quarter of 2021, certain investors exercised their warrants previously issued by the Company.

In July 2021, the Company consummated a registered direct offering of ordinary shares and warrants.

On March 3, 2022, the Company consummated a registered direct offering of ordinary shares and warrants.

The Company's ordinary shares are listed on the NASDAQ Capital Market under the symbol "CHEK".

The consolidated financial statements of the Company as of and for the six months ended June 30, 2023, include the financial statements of the Company and its wholly-owned U.S. subsidiary.

(5)

Since its inception, the Company has devoted substantially all of its efforts to research and development, clinical trials, recruiting management and technical staff, acquiring assets and raising capital. The Company has incurred losses of $11,320 and $10,641 for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, the Company's accumulated deficit was approximately $138,613.

The Company has funded its operations to date primarily through equity financings, sale of its ordinary shares and warrants, the exercise of warrants and other financing transactions and through grants from the Israel Innovation Authority of the Ministry of Economy and Industry.

CHECK CAP LTD

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(U.S. dollars in thousands, except share and per share data)

NOTE 1 - GENERAL INFORMATION

General (cont.)

	(6)	In early 2020, the World Health Organization declared the rapidly spreading coronavirus disease (COVID-19) outbreak a pandemic. The Company experienced disruptions to its operations as a result of the COVID-19 pandemic including disruptions to the Company’s clinical studies, and as a result, faced delays in its clinical trials. The extent to which the COVID-19 pandemic shall impact the Company’s operations in the future will depend on future developments, which are highly uncertain and cannot be predicted with confidence.

NOTE 2 - CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

The accompanying consolidated unaudited financial statements have been prepared in a condensed format and include the consolidated unaudited financial operations of the Company as of June 30, 2023 and for the six and three month periods then ended, in accordance with U.S. GAAP, relating to the preparation of financial statements for interim periods. Accordingly, the accompanying consolidated unaudited financial statements do not include all the information and footnotes required by generally accepted accounting principles for complete set of financial statements. These consolidated unaudited financial statements should be read in conjunction with the audited financial statements and the accompanying notes of the Company for the year ended December 31, 2022 that are included in the Company's Annual Report on Form 20-F, filed with the Securities and Exchange Commission on March 31, 2023 (the "Annual Report"). In the opinion of management, all adjustments (including adjustments related to the reduction of workforce and discontinuance of the clinical studies) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2023, are not necessarily indicative of the results that may be expected for the year ended December 31, 2023.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies that have been applied in the preparation of the unaudited consolidated financial statements are identical to those that were applied in preparation of the Company’s most recent annual financial statements in connection with the Annual Report.

CHECK CAP LTD

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(U.S. dollars in thousands, except share and per share data)

NOTE 4 - LEASES

The Company leases vehicles and offices under various operating lease agreements.

Following the determination of Company’s Board of Directors on June 6, 2023 to discontinue the Company’s clinical studies (see Note 1 A (3)), on June 8, 2023, the Company terminated its sub-lease agreement in Petach Tikva, and the agreement shall terminate on September 8, 2023. The Company currently does not expect to extend the lease agreement of its offices in Isfiya and Petach Tikva, Israel that expire on December 31, 2023 and February 24, 2024, respectively.

According to ASC 842, the changes described above are a triggering event for reassessment of the lease terms and as a result, the lease liability was remeasured as of the reassessment date with an adjustment recorded to the underlying right of use assets.

At June 30, 2023, the Company’s operating lease assets and lease liabilities for operating leases totaled $223 and $83, respectively.

Supplemental cash flow information related to operating leases was as follows:

		Six months ended June 30, 2023
Cash payments for operating leases		$	223

The Company uses its incremental borrowing rate as the discount rate for its leases, as the implicit rate in the lease is not readily determinable. As of June 30, 2023, the Company’s operating leases had a weighted average remaining lease term of 5 months and a weighted average borrowing rate of 11%. Future lease payments under operating leases as of June 30, 2023 were as follows:

	Operating
	Leases
Second half of 2023	$	130
2024	$	3

Total future lease payments	$	133
Less imputed interest		(50	)
Total lease liability balance	$	83

CHECK CAP LTD

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(U.S. dollars in thousands, except share and per share data)

NOTE 5 - SHARE-BASED COMPENSATION

1.	A summary of the Company's option activity related to options granted to employees, service providers and directors, and related information is as follows:

	For the six months ended June 30, 2023
						Weighted
				Weighted		average
				average		remaining
				exercise price		contractual
	Number			(in $)		life (in years)

Options outstanding at beginning of period		191,892			35.35		8.59
Options granted		903			2.82
Options forfeited and expired		(2,901	)		158.58

Options outstanding at end of period		189,894			33.31		8.62

Options exercisable at end of period		73,560			58.77		7.84

2.	A summary of the Company’s restricted stock awards (“RSUs”) activity is as follows:

	For the six
	months
	ended June
	30, 2023

Unvested at beginning of period		19,703
Granted		-
Vested		(4,753	)
Forfeited		(1,853	)
Unvested at end of period		13,097

On January 4, 2023, the Company's Board of Directors resolved to increase the number of ordinary shares of the Company reserved for issuance under the Check-Cap Ltd. 2015 Equity Incentive Plan by an additional 30,000 ordinary shares.

Following the balance sheet date, due to the termination of the employment of Company employees (see Note 1A(3)), an aggregate of 21,759 options and RSUs expired.

NOTE 6 - IMPAIRMENT OF FIXED ASSETS

On June 6, 2023, the Company announced that following a review of its business, resources and capabilities, it is exploring strategic alternatives (see Note 1A(3)).

As a result , due to changes in circumstances that indicate that the carrying amount of an asset (or asset group) may not be recoverable, the Company reviewed its long-lived assets for impairment in accordance with ASC 360-10 "Accounting for the Impairment or Disposal of Long-Lived Assets" and determined that the fixed assets are considered to be impaired by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Therefore, the Company recorded an impairment loss of 1,364 for the six months ended June 30, 2023.

Document and Entity Information	6 Months Ended
Document and Entity Information	Jun. 30, 2023
Document and Entity Information [Abstract]
Entity Registrant Name	Check-Cap Ltd.
Document Type	6-K
Document Period End Date	Jun. 30, 2023
Amendment Flag	false
Entity Central Index Key	0001610590
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Entity Address, Address Line One	Check-Cap Building
Entity Address, Address Line Two	Abba Hushi Avenue
Entity Address, Address Line Three	P.O. Box 1271
Entity Address, City or Town	Isfiya
Entity Address, Postal Zip Code	30090
Entity Address, Country	IL

CONSOLIDATED UNAUDITED BALANCE SHEETS - USD ($)
$ in Thousands

Jun. 30, 2023

Dec. 31, 2022

Current assets

Cash and cash equivalents

$ 2,254

$ 4,090

Restricted cash

350

352

Short-term bank deposit

29,815

37,609

Prepaid expenses and other current assets

838

579

Total current assets

33,257

42,630

Non-current assets

Property and equipment, net

245

1,751

Operating leases

223

1,060

Total non-current assets

468

2,811

Total assets

33,725

45,441

Accounts payable and accruals

Trade

783

952

Other

675

802

Employees and payroll accruals

1,946

1,261

Other current liabilities

Operating lease liabilities

337

Total current liabilities

3,535

3,408

Non-current liabilities

Royalties provision

Operating lease liabilities

627

Total non-current liabilities

721

Shareholders' equity

Share capital, Ordinary shares, 48 NIS par value (18,000,000 authorized shares as of June 30, 2023 and December 31, 2022, respectively; 5,849,216 and 5,844,463 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively)

^[1]

83,728

83,664

Additional paid-in capital

85,075

84,941

Accumulated deficit

(138,613)

(127,293)

Total shareholders' equity

30,190

41,312

Total liabilities and shareholders' equity

$ 33,725

$ 45,441

[1]	All share amounts have been retroactively adjusted to reflect a 1-for-20 reverse share split.

CONSOLIDATED UNAUDITED BALANCE SHEETS (Parenthetical) - ₪ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Ordinary shares, par value per share	₪ 48	₪ 48
Ordinary shares, shares authorized	18,000,000	18,000,000
Ordinary shares, shares issued	5,849,216	5,844,463
Ordinary shares, shares outstanding	5,849,216	5,844,463

CONSOLIDATED UNAUDITED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Research and development expenses, net	$ 4,480	$ 3,545	$ 8,151	$ 7,673
General and administrative expenses	1,583	1,343	2,762	3,100
Impairment of fixed assets	1,364	0	1,364	0
Operating loss	7,427	4,888	12,277	10,773
Finance Income, net	549	81	957	132
Loss before income tax	6,878	4,807	11,320	10,641
Net loss for the period	$ 6,878	$ 4,807	$ 11,320	$ 10,641
Loss per share:
Net loss per ordinary share basic	$ 1.18	$ 0.82	$ 1.94	$ 1.94
Net loss per ordinary share diluted	$ 1.18	$ 0.82	$ 1.94	$ 1.94
Weighted average number of ordinary shares outstanding - basic	5,848,565	5,840,089	5,847,392	5,497,548
Weighted average number of ordinary shares outstanding - diluted	5,848,565	5,840,089	5,847,392	5,497,548

CONSOLIDATED UNAUDITED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($)
$ in Thousands

Ordinary Share [Member]

Additional paid-in capital [Member]

Accumulated deficit [Member]

Total

Beginning balance at Dec. 31, 2021

$ 68,787

$ 90,089

$ (108,185)

$ 50,691

Beginning balance, shares at Dec. 31, 2021

^[1]

4,840,089

Issuance of ordinary shares and warrants in March 2022 registered direct offerings, net of issuance expenses in an amount of $1,150

$ 14,815

(5,965)

8,850

Issuance of ordinary shares and warrants in March 2022 registered direct offerings, net of issuance expenses in an amount of $1,150, shares

^[1]

1,000,000

Share-based compensation

$ 0

250

Net loss

(5,834)

Ending balance at Mar. 31, 2022

$ 83,602

84,374

(114,019)

53,957

Ending balance, shares at Mar. 31, 2022

^[1]

5,840,089

Beginning balance at Dec. 31, 2021

$ 68,787

90,089

(108,185)

50,691

Beginning balance, shares at Dec. 31, 2021

^[1]

4,840,089

Net loss

(10,641)

Ending balance at Jun. 30, 2022

$ 83,602

84,648

(118,826)

49,424

Ending balance, shares at Jun. 30, 2022

^[1]

5,840,089

Beginning balance at Mar. 31, 2022

$ 83,602

84,374

(114,019)

53,957

Beginning balance, shares at Mar. 31, 2022

^[1]

5,840,089

Share-based compensation

$ 0

274

Net loss

(4,807)

Ending balance at Jun. 30, 2022

$ 83,602

84,648

(118,826)

49,424

Ending balance, shares at Jun. 30, 2022

^[1]

5,840,089

Beginning balance at Dec. 31, 2022

$ 83,664

84,941

(127,293)

41,312

Beginning balance, shares at Dec. 31, 2022

^[1]

5,844,463

Share-based compensation

$ 0

156

Net loss

(4,442)

RSUs vesting

$ 46

(46)

RSUs vesting, shares

^[1]

3,375

Ending balance at Mar. 31, 2023

$ 83,710

85,051

(131,735)

37,026

Ending balance, shares at Mar. 31, 2023

^[1]

5,847,838

Beginning balance at Dec. 31, 2022

$ 83,664

84,941

(127,293)

41,312

Beginning balance, shares at Dec. 31, 2022

^[1]

5,844,463

Net loss

(11,320)

Ending balance at Jun. 30, 2023

$ 83,728

85,075

(138,613)

30,190

Ending balance, shares at Jun. 30, 2023

^[1]

5,849,216

Beginning balance at Mar. 31, 2023

$ 83,710

85,051

(131,735)

37,026

Beginning balance, shares at Mar. 31, 2023

^[1]

5,847,838

Share-based compensation

$ 0

Net loss

(6,878)

RSUs vesting

$ 18

(18)

RSUs vesting, shares

^[1]

1,378

Ending balance at Jun. 30, 2023

$ 83,728

$ 85,075

$ (138,613)

$ 30,190

Ending balance, shares at Jun. 30, 2023

^[1]

5,849,216

[1]	All share amounts have been retroactively adjusted to reflect a 1-for-20 reverse share split.

CONSOLIDATED UNAUDITED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) $ in Thousands	1 Months Ended
	Mar. 31, 2022 USD ($)
Issuance expenses	$ 1,150

CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (11,320)	$ (10,641)
Adjustments required to reconcile net loss to net cash used in operating activities:
Depreciation	190	159
Impairment of fixed assets	1,364	0
Share-based compensation	198	525
Financial income, net	(323)	(239)
Changes in assets and liabilities items:
Increase in prepaid and other current assets and non-current assets	(255)	(152)
Increase (decrease) in trade accounts payable, accruals and other current liabilities	(270)	320
Increase (decrease) in employees and payroll accruals	686	(293)
Decrease in royalties provision	(94)	(25)
Net cash used in operating activities	(9,824)	(10,346)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	(83)	(323)
Changes in short-term deposits	8,069	(13,000)
Net cash provided by (used in) investing activities	7,986	(13,323)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of ordinary shares in the registered direct offerings, net of issuance expenses	0	8,850
Net cash provided by financing activities	0	8,850
Net increase in cash, cash equivalents and restricted cash	(1,838)	(14,819)
Cash, cash equivalents and restricted cash at the beginning of the period	4,442	26,807
Cash, cash equivalents and restricted cash at the end of the period	2,604	11,988
Supplemental disclosure of non-cash flow information
Purchase of property and equipment included in accounts payable and accrued expenses	0	38
Assets acquired under operating lease	136	167
Supplemental disclosure of cash flow information:
Cash paid for taxes	2	3
Interest received	$ 654	$ 138

GENERAL INFORMATION

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GENERAL INFORMATION