{"url_path":"/sec/mbai/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 Financial Information**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-04-27","source_url":"https://www.sec.gov/Archives/edgar/data/1610590/0001213900-26-048090-index.html","accession_number":"0001213900-26-048090","cik":"0001610590","ticker":"MBAI","issuer_name":"Check-Cap Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1610590/0001213900-26-048090-index.html","primary_entity_key":"0001610590","primary_entity_name":"Check-Cap Ltd"},"word_count":787,"has_tables":true,"body_markdown":"** **\n\n**Item 8. Financial Information**\n\n** **\n\n**A. Consolidated Statements and Other Financial\nInformation.**\n\n** **\n\n**Consolidated Financial Statements**\n\n \n\nSee Item 18 “Financial\nStatements.”\n\n** **\n\n**Legal Proceedings**\n\n \n\nFrom time to time, we may\nbe involved in litigation that arises through the normal course of business. The following legal proceedings were pending as of December\n31, 2025.\n\n \n\nOn October 7, 2024, a minority\nshareholder of the Company filed an application in the Haifa District Court (the “Court”) seeking certification of a shareholders’\nderivative lawsuit against the Company, certain present and former directors, and a third party. The claim seeks damages in excess of\nNIS 2.5 million (approximately $784,000) and relates primarily to corporate governance matters, including the validity of certain board\ndecisions and the legality of certain corporate transactions. We filed a response with the Court requesting that certification of the\nclaim as a derivative action be denied. The parties are currently engaged in mediation.\n\n \n\nWe believe the claims in\nthe derivative action are without merit and we intend to defend vigorously against this action.\n\n \n\nDuring 2024, two former senior\nexecutives filed separate claims against the Company seeking an aggregate of approximately NIS 620,000 (approximately $195,000) in respect\nof alleged unpaid compensation and contractual entitlements following the termination of their respective engagements. We have denied\nboth claims. Statements of Defense were filed in both matters and management believes it is probable the Company will be successful in\ndefending against both claims.\n\n \n\nAlso during 2024, a former\nlegal services provider filed a claim seeking approximately NIS 175,000 (approximately $55,000) for alleged unpaid legal fees. We have\ndenied the claim, a Statement of Defense has been filed, and the parties are engaged in concurrent mediation proceedings. Management believes\nit is probable the Company will be successful in defending against this claim.\n\n \n\nIn September 2024, we ceased\nmaking rent payments in respect of our leased premises in Usfiyeh, Israel. The landlord commenced legal proceedings against us and an\neviction order was subsequently granted by the court. We have engaged legal counsel in connection with this matter. We have ceased active\nbusiness operations at the facility, and certain Company property and documentation remain on the premises pending resolution of access\nand logistical matters. The landlord’s claim for unpaid rent and damages totals approximately NIS 207,000 (approximately $65,000).\nFor further information, see Note 8C to our audited consolidated financial statements.\n\n \n\nFor all of the above matters,\nbased on the information currently available and after consultation with legal counsel, management does not believe an unfavorable outcome\nis probable and, accordingly, no provision has been recorded in these consolidated financial statements.\n\n**  **\n\n**Dividend Policy**\n\n \n\nWe have never declared or\npaid dividends on our ordinary shares and currently do not intend to pay cash dividends on our ordinary shares in the foreseeable future.\nWe currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. See Item 3D “Key\nInformation - Risk factors - Risks Related to the Company.”\n\n \n\n105\n\n \n\n \n\nOur ability to distribute\ndividends also may be limited by future contractual obligations and by Israeli law. The Israeli Companies Law restricts our ability to\ndeclare dividends. Unless otherwise approved by a court, we can distribute dividends only from “profits” (as defined by the\nIsraeli Companies Law), and only if there is no reasonable concern that the dividend distribution will prevent us from meeting our existing\nand foreseeable obligations as they become due. Subject to the foregoing, payment of future dividends, if any, will be at the discretion\nof our Board of Directors and will depend on various factors, such as our financial condition, operating results, current and anticipated\ncash needs and other business and economic factors that our Board of Directors may deem relevant. See Exhibit 2.1 “Description of\nSecurities-Dividend and Liquidation Rights.” The payment of dividends may be subject to Israeli withholding taxes. See Item 10E.\n“Additional Information-Taxation-Israeli Tax Considerations and Government Programs-Taxation of Our Shareholders-Taxation of Non-Israeli\nShareholders on Receipt of Dividends.” Furthermore, if we pay a dividend out of income attributed to our Benefited Enterprise that\nwas generated during the tax exemption period, we may be subject to tax on the grossed- up amount of such distributed income at the corporate\ntax rate which would have been applied to our Benefited Enterprise’s income had we not enjoyed the exemption. See Item 10E. “Additional\nInformation-Taxation - Israeli Tax Considerations and Government Programs - Law for the Encouragement of Capital Investments, 5719-1959\n- Tax Benefits Subsequent to the 2005 Amendment.”\n\n** **\n\n**B. Significant Changes**\n\n \n\nExcept as disclosed elsewhere\nin this Annual Report and in Note 17 to our audited consolidated financial statements, there have been no other significant changes since\nDecember 31, 2025, until the date of the filing of this Annual Report."}