2023-12-06 15:35:30
Check-Cap Shareholders Meeting Postponed Amidst Growing Opposition
December 6, 2023
The sale deal of Check-Cap is apparently running into trouble as the shareholders’ meeting, which was supposed to approve it yesterday, has been postponed to December 18. This move comes under pressure from Symmetrix, which threatened legal action, and in light of growing opposition from part of the shareholders and founder of the company, Yoav Kimchi.
In mid-August, Check-Cap announced the signing of a merger agreement with Keystone Dental from California. The agreement would have seen the shareholders of Check-Cap receiving about 15% of the shares of the merged company, reflecting a value of about 39.7 million dollars for Check-Cap. However, this move has been met with displeasure by some of the shareholders, including Symmetryx, which owns about 5.6% of Check-Cap’s shares, and the company’s founder, Yoav Kimchi.
Kimchi, who founded Check-Cap in 2006 and served as the company’s CTO until his dismissal after the signing of the merger agreement, has expressed his dissatisfaction with the deal. According to Kimchi, the merger agreement does not place any value on the company’s extensive intellectual property, which includes more than 50 patents.
The Check-Cup company, based in Isfaia, developed a sophisticated system for performing an X-ray scan of the colon using a swallowable capsule, which includes a radiation source and a detector. The company received marketing approval in Europe (CE) in 2017, and was in the midst of clinical trials in the United States with the aim of obtaining FDA approval.
However, the first stage of the central trial in the United States did not produce the desired results, leading the company to announce the cessation of its activities and the firing of about 90% of its employees. Kimchi claims that the decision to stop the activity was made without consulting the company’s management, and that efforts were already being made to look for a buyer for the company without informing him or the other employees.
Symmetrix, one of the largest shareholders in Check-Cap, has been vocal in its opposition to the deal, arguing that it does not reflect the value inherent in the company. The investment company has also tried to change the board of directors and has expressed concerns about the valuation of Keystone Dental in the merger agreement.
Check-Cap, which was issued on the NASDAQ at a value of 92 million dollars in 2015, has raised significant capital over the years through various rounds of share allocation. The company’s future remains uncertain as the shareholders’ meeting is postponed amidst the growing opposition to the proposed sale deal.
The story is developing, and we will continue to bring you updates as the situation unfolds.
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