Check-Cap Ltd

C. Material Contracts

Other than as described below, in Item 4. “Information on Our Company,” Item 7B “Major Shareholders and Related Party Transactions - Related Party Transactions” or elsewhere in this Annual Report, we have not entered into any material contracts other than in the ordinary course of business.

Business Combination Agreement with Nobul

On March 25, 2024, we entered into the Nobul BCA. Pursuant to the Nobul BCA, (a) a wholly owned subsidiary of Nobul, to be formed under the laws of Israel, will merge with and into us, with us surviving the Merger as a direct, wholly owned subsidiary of Nobul.

At the Merger Effective Time (a) each Check-Cap ordinary share issued and outstanding immediately prior to the Merger Effective Time (other than treasury, dormant shares or Check-Cap Excluded Shares (as defined in the Nobul BCA)) will automatically convert into a number of Nobul Common Shares equal to the Nobul Exchange Ratio (as defined in the Nobul BCA), (b) each Check-Cap option, unvested RSU and CLA Warrant that is outstanding immediately prior to the Merger Effective Time will automatically expire, (c) each vested Check-Cap RSU that is outstanding and unsettled immediately prior to the Merger Effective Time shall automatically convert into Nobul Common Shares based on the number of Check-Cap ordinary shares underlying the RSUs and the Nobul Exchange Ratio, and (d) any outstanding and unexercised warrants with a change of control redemption feature that are not redeemed in accordance with their terms will be complied with by Nobul in accordance with their terms.

Under the exchange ratio formula in the Nobul BCA, upon the closing of the transactions contemplated under the Nobul BCA, Check-Cap security holders are expected to own approximately 15% of Nobul while Nobul security holders are expected to own approximately 85% of Check-Cap, on a fully diluted basis and assuming that Check-Cap meets certain net cash targets, the ownership percentages may be subject to adjustments based on Check-Cap’s net cash at closing.

The Nobul BCA contains customary representations, warranties and covenants made by the parties, including covenants relating to obtaining the requisite approvals of the security holders of Check-Cap and Nobul, indemnification of directors and officers, and Check-Cap’s and Nobul’s conduct of their respective businesses between the date of signing of the Nobul BCA and the closing. In addition, pursuant to the Nobul BCA, during the pendency of the Business Combination, we may not sell, issue, grant, pledge or otherwise dispose of or encumber or authorize the issuance of: (a) any capital stock or other security (except for our ordinary shares issued upon the valid exercise, vesting or settlement of outstanding options, RSUs, warrants or as required pursuant to our employee plan in effect as of the date of the Nobul BCA), (b) any option, warrant or right to acquire any capital stock or any other security or (c) any instrument convertible into or exchangeable for any capital stock or other security, which may adversely affect our financial condition and results of operations.

The closing is subject to satisfaction or waiver of certain conditions including, among other things, (i) the registration statement on Form F-4 referred to in the Nobul BCA been declared effective by the SEC, (ii) the required approvals by the Check-Cap shareholders of the Merger, (iii) Nasdaq listing approval with respect to Nobul Common Shares having been obtained, and the Nobul Common Shares to be issued in connection with the Merger pursuant to the Nobul BCA having been approved for listing (subject to official notice of issuance) on Nasdaq, (iv) any waiting period applicable to the consummation of Merger under any applicable antitrust law having expired or been terminated, (v) at least 50 days having elapsed after the filing of the Israeli merger proposal with the Israeli Companies Registrar and at least 30 days having elapsed after the Check-Cap shareholder approval and the Israeli Companies Registrar having issued a certificate evidencing the Merger; (vi) the receipt of a no-action letter from the Israeli Securities Authority, (vii) the receipt of certain Israeli tax rulings, and (viii) approval of the Israeli District Court with respect to the distribution of Check-Cap cash following the closing. The Business Combination is also subject to approval by the Ontario Securities Commission of a long form final prospectus in connection with the Merger.

On April 5, 2024, EquityLine Alternate Assets GP Inc. (“EquityLine”), a corporation incorporated under the laws of the Province of Ontario, Canada, Sergiy Shchavyelyev, the sole director of EquityLine, and each of the other Check-Cap shareholders (each, a “Shareholder”) entered into a support agreement (the “Support Agreement”) with Check-Cap. Pursuant to the Support Agreement, each Shareholder has agreed, among other things, to vote in favor of the Nobul BCA at any shareholder meeting to be convened for matters in connection with the Business Combination.

The Nobul BCA contains provisions granting both Check-Cap and Nobul the right to terminate the Nobul BCA for certain reasons, including, among others, (i) the Merger not having been consummated by December 31, 2024 (subject to certain exceptions and to potential automatic extension), (ii) any governmental authority having issued an order, decree or ruling, or taken any other action (including the enactment of any statute, rule, regulation, decree or executive order) enjoining or prohibiting the Merger, or (iii) under certain conditions, there having been a material breach of any of the representations, warranties, covenants or agreements set forth in the Nobul BCA by a party to the Nobul BCA.

After the closing, management of Nobul is expected remain unchanged while the board of directors of the Check-Cap shall consist of individuals designated by Nobul.

In May 2024, Check-Cap reimbursed Nobul $3.8 million pursuant to the provisions of the cost-sharing provisions of the Nobul BCA.

On September 8, 2024, the Board of Directors approved and ratified the September 2024 Loan Agreement with Nobul. Pursuant to the September 2024 Loan Agreement, Check-Cap agreed to provide Nobul a loan in the principal amount of $6.0 million. The principal outstanding under the loan will bear interest at 5% per annum, both before and after demand, default, and judgment, and will be payable annually in arrears. The aggregate amount of the loan and any accrued and unpaid interest thereon will be due and be paid on the date that is 30 days following the date the Nobul BCA is terminated, or the Business Combination is consummated.

In addition, on September 8, 2024, the Board of Directors approved and ratified the Amending Letter with Nobul. The Amending Letter amends the Nobul BCA and obligates Check-Cap to deposit $11.0 million into a designated, segregated and interest-bearing bank account. Funds deposited into this account may be disbursed upon the mutual written agreement of the designated representatives of Nobul and Check-Cap (being their respective board chairs) in order to fund the pursuit of accretive acquisition targets or other growth initiatives of Nobul and for no other purpose. Any funds so disbursed will reduce the Net Cash Target (as defined in the Nobul BCA) on a dollar-for-dollar basis. In the event that the Nobul BCA is terminated, then, subject to the payment of any termination fees triggered by Section 9.3(c) of the Nobul BCA, funds remaining in the segregated account upon termination, together with interest earned thereon, will accrue to and will be for the account and benefit of Check-Cap.

On December 23, 2024, the Board of Directors approved the December 2024 Loan Agreement with Nobul. Pursuant to the December 2024 Loan Agreement, Check-Cap agreed to provide Nobul a loan in the principal amount of $6.0 million. The principal outstanding under the loan will bear interest at 5% per annum, both before and after demand, default, and judgment, and will be payable annually in arrears. The aggregate amount of the loan and any accrued and unpaid interest thereon will be due and be paid on the date that is 30 days following the date the Nobul BCA is terminated, or the Business Combination is consummated.

The $6.0 million loan will be funded from the previously created designated, segregated and interest-bearing bank account. Funds deposited into the Segregated Account may be disbursed upon the mutual written agreement of the designated representatives of Nobul and Check-Cap (being their respective board chairs) in order to fund the pursuit of accretive acquisition targets or other growth initiatives of Nobul and for no other purpose. Check-Cap and Nobul have identified acquisition targets and growth initiatives for which the proceeds of the $6.0 million loan will be used.

As of December 31, 20242.1 million of the Segregated Account had been used for acquisition targets and growth initiatives, $0.7 million had been used for certain expenses incurred by the Company, and $2.2 million remained in the Segregated Account. In July 2025, in connection with the audit of the Company’s December 31, 2024 financial statements, the Company classified the $2.1 million used for acquisition targets and growth initiatives as a $2.1 million loan to Nobul and entered into a loan agreement with Nobul on the same terms as the December 2024 Loan Agreement to document such classification. Also, in July 2025, in connection with the audit of the Company’s December 31, 2024 financial statements, the Company classified the $2.2 million remaining in the Segregated Account as of December 31, 2024 as a $2.2 million loan to Nobul and entered into a loan agreement with Nobul on the same terms as the December 2024 Loan Agreement to document such classification, given that the Segregated Account is in the name of an affiliate of Nobul.

As of December 31, 2024, the Company had provided total loan funding of approximately $16.3 million from Nobul, and has accrued interest receivable of approximately $138,000. In accordance with ASC 326,Financial Instruments – Credit Losses, management evaluated the collectability of the Nobul loan receivable. Due to the significant uncertainty surrounding the recoverability of these amounts, management has determined that the appropriate and conservative course of action is to fully impair the Nobul loan receivable and related accrued interest as of December 31, 2024.