Check-Cap to execute 1-for-7 reverse stock split on Wednesday

Check-Cap Ltd. said on Monday it will implement a 1-for-7 reverse stock split effective before the market open on Wednesday, June 12. The move is intended to raise the company’s share price above Nasdaq’s minimum $1 bid requirement, which it has breached due to prolonged trading below the threshold.

The reverse split will reduce the total number of outstanding shares by approximately 85.7%, while the par value per share will be proportionally adjusted. Existing shareholders will receive one new share for every seven shares held as of the close on Tuesday, June 11. Fractional shares will not be issued.

The company’s American Depositary Shares, which currently trade under the ticker CHEK, will also be affected by the corporate action. Check-Cap said the split is not expected to alter the company’s market capitalization or its underlying business operations. The ADS ratio will be adjusted to reflect the reverse split, maintaining the same economic exposure per ADS.

Nasdaq’s listing rules require companies to maintain a minimum $1 closing bid price for continued listing. Check-Cap has received a compliance notice and has until December 9, 2024, to regain compliance, though the company has opted to execute the reverse split earlier to avoid potential delisting risk.

Check-Cap develops and markets imaging systems for colorectal cancer screening. Its shares have traded below $1 for extended periods in recent months, prompting the corporate action.