The MBody AI & Check‑Cap Merge marks a strategic pivot toward embodied artificial intelligence, aiming to reshape the autonomous workforce landscape. Check‑Cap Ltd. (NASDAQ: CHEK) has signed a definitive merger agreement with MBody AI, forming a combined entity that will trade under the new name MBody AI Ltd.

This transformation signals Check‑Cap’s shift away from its core medical diagnostics roots to capitalise on one of the most promising sectors in technology: embodied AI.

Transaction Structure: MBody AI Takes the Lead

Under the terms of the agreement, MBody AI shareholders will receive 90% of the combined company’s fully diluted share capital. Check‑Cap shareholders will retain only 10%. The stark ownership imbalance reflects Check‑Cap’s weakened negotiating position, largely influenced by ongoing financial distress and non‑compliance with Nasdaq’s equity requirements.

The merger still requires approval from Check‑Cap shareholders, with a vote scheduled at the Annual General Meeting on October 17, 2025.

Strategic Direction: Expanding into High-Growth AI Verticals

MBody AI develops proprietary embodied AI platforms—intelligent systems with real‑time adaptive capabilities and physical interaction functionality. While initially focused on hospitality automation, the company plans to expand into warehousing, office management, and healthcare—sectors with significant operational inefficiencies and addressable labour expenditure.

Morgan Stanley projects the embodied AI market to reach $40 trillion by 2050, potentially contributing $16 trillion in added value to global equity markets.

Legacy Business Preservation: Medical Assets Remain Active

Although Check‑Cap is shifting its strategic focus, the new entity will retain its legacy medical assets, including proprietary diagnostic equipment and registered patents. Additionally, the company intends to explore synergies with its existing Ghost Kitchen franchise rights in New Jersey, though specifics remain sparse.

This hybrid model allows MBody AI Ltd. to pursue exponential growth in AI while keeping its medical intellectual property under strategic consideration.

Compliance Concerns: Nasdaq Listing and Capital Infusion

Check‑Cap recently received a Nasdaq non‑compliance notice for failing to meet the $2.5 million stockholders’ equity requirement under Rule 5550(b)(1). The company must submit a compliance plan by October 20, 2025, or risk delisting.

The merger, alongside a planned private placement, is positioned as a means of restoring compliance. However, final approval will depend on Nasdaq’s assessment and the successful completion of financing.

Risks & Challenges: Shareholder Dilution and Transparency Gaps

While the MBody AI & Check‑Cap Merge offers a compelling narrative, several concerns emerge:

• Severe dilution for existing Check‑Cap shareholders (90/10 ownership split).
• No disclosed financial metrics for MBody AI—no revenue, profitability, or cash flow data.
• Heavy reliance on speculative forecasts, such as the $40 trillion market valuation.
• Uncertainty surrounding private placement terms and investor appetite.

This appears to be a reverse merger, giving private company MBody AI access to public markets without an IPO, while offering Check‑Cap a last resort to maintain its Nasdaq listing.

Strategic Outlook: High Potential, High Risk

If approved, the MBody AI & Check‑Cap Merge could establish a new player in one of the fastest‑evolving technology frontiers. However, execution risk remains high. The deal’s success will hinge on securing financing, resolving regulatory issues, and proving MBody AI’s capacity to deliver tangible results across its target markets.

Investors should weigh the long‑term promise of embodied AI against the immediate dilution and operational uncertainties associated with this transaction.