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Item 1A. Risk Factors

2021-04-13 compared with 2020-04-14 · 639 added, 680 removed, 186 unchanged (88% of the section changed)

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investment in our common stock involves a high degree of risk.

Before making an investment decision, you should carefully consider

the following risk factors.

If any of these risks actually occur, our business, financial condition and results of operations

could be materially harmed.

In addition, risks and uncertainties not presently known to us or that we currently deem immaterial

may also materially harm our business, financial condition and results of operations.

If this were to happen, the value of our

common stock could decline significantly, and you could lose all or part of your investment.

have a history of operating losses, and there is no assurance that we will generate material revenues or become profitable in

the near future.

Before making an investment decision, you should carefully consider the

following risk factors.

If any of these risks actually occur, our business, financial condition and results of operations could be materially

In addition, risks and uncertainties not presently known to us or that we currently deem immaterial may also materially harm

our business, financial condition and results of operations.

If this were to happen, the value of our common stock could decline significantly,

and you could lose all or part of your investment.

have a history of operating losses, and there is no assurance that we will generate material revenues or become profitable in the near

are a medical device company with a limited operating history.

We are not profitable and have incurred losses since our inception.

To date we have not generated material revenue from the sale of products, and we do not anticipate that we will report operating

income in the near future.

Our initial product, the GlucoTrack®

model DF-F, has not been approved for marketing in the United

States and may not be sold or marketed without FDA clearance or approval in the United States.

date we have not generated material revenue from the sale of products, and we do not anticipate that we will report operating income

in the near future.

Our initial product, GlucoTrack®

1.0, has not been approved for marketing in the United States and may

not be sold or marketed without FDA clearance or approval in the United States.

Our next generation product, GlucoTrack®

currently under development.

While our GlucoTrack®

DF-F received CE Mark approval in 2013, there is no assurance that we will be able to generate any material revenues from sales

of such model in the EU or any other jurisdictions.

We continue to incur research and development and selling, marketing and general

and administrative expenses related to our operations, development and commercialization of our first product.

Our operating losses

for the years ended December 31, 2019 and 2018 were approximately $3.6 million and $6.5 million, respectively, and we had an accumulated

deficit of approximately $90.8 million as of December 31, 2019.

We expect to continue to incur losses for the foreseeable future,

and these losses will likely increase as we prepare for and begin to commercialize the GlucoTrack®

If we are not

successful in manufacturing and distributing the GlucoTrack®

model DF-F, or if the GlucoTrack®

model DF-F does not achieve

market acceptance, we may never become profitable.

Even if we achieve profitability in the future, we may not be able to sustain

profitability in subsequent periods.

have never declared or paid any cash dividends on our Common Stock and do not anticipate paying any dividends on our Common Stock

in the foreseeable future.

have never declared or paid any cash dividends on our Common Stock and do not anticipate paying any dividends on our Common Stock

in the foreseeable future.

1.0 received CE Mark approval in 2013, there is no assurance that we

will be able to generate any material revenues from sales of such model in the EU or any other jurisdictions.

We continue to incur research

and development and selling, marketing and general and administrative expenses related to our operations, development and commercialization

of our first product.

Our operating losses for the years ended December 31, 2020 and 2019 were approximately $3.1 million and

$3.5 million, respectively, and we had an accumulated deficit of approximately $93.4 million as of December 31, 2020.

We expect to continue

to incur losses for the foreseeable future, and these losses will likely increase as we develop and prepare to commercialize GlucoTrack®

If we are not successful in developing, manufacturing and distributing GlucoTrack®

2.0, or if GlucoTrack®

2.0 does not achieve market acceptance, we may never become profitable.

Even if we achieve profitability in the future, we may

not be able to sustain profitability in subsequent periods.

have never declared or paid any cash dividends on our Common Stock and do not anticipate paying any dividends on our Common Stock in

the foreseeable future.

have never declared or paid any cash dividends on our Common Stock and do not anticipate paying any dividends on our Common Stock in

the foreseeable future.

Any cash that might be available for payment of dividends will be used to expand our business.

of any cash dividends in the future will depend on our financial condition, results of operation and capital requirements, as

well as other factors deemed relevant to our Board of Directors.

crises and market instability may materially and adversely affect the demand for our products, as well as our ability to obtain

credit or secure funds through sales of our stock, which may materially and adversely affect our business, financial condition

and ability to fund our operations.

crises may reduce the demand for new and innovative medical devices, resulting in delayed market acceptance of our products, if

and when they are approved.

Such a delay could have a material adverse impact on our business, expected cash flows, results of

operations and financial condition.

Additionally, we have funded our operations to date primarily through private sales of securities,

including common stock and other securities convertible into or exercisable for shares of our common stock.

Economic turmoil and

instability in the world’s equity and credit markets and in the unstable world may materially adversely affect our ability

to sell additional securities and/or borrow cash.

There can be no assurance that we will be able to raise additional working capital

on acceptable terms or at all, and any failure to do so may materially adversely affect our ability to continue operations.

Payments of any

cash dividends in the future will depend on our financial condition, results of operation and capital requirements, as well as other

factors deemed relevant to our Board of Directors.

crises and market instability may materially and adversely affect the demand for our products, as well as our ability to obtain credit

or secure funds through sales of our stock, which may materially and adversely affect our business, financial condition and ability to

fund our operations.

crises may reduce the demand for new and innovative medical devices, resulting in delayed market acceptance of our products, if and when

they are approved.

Such a delay could have a material adverse impact on our business, expected cash flows, results of operations and

financial condition.

Additionally, we have funded our operations to date primarily through private sales of securities, including common

stock and other securities convertible into or exercisable for shares of our common stock.

Economic turmoil and instability in the world’s

equity and credit markets and in the unstable world may materially adversely affect our ability to sell additional securities and/or

There can be no assurance that we will be able to raise additional working capital on acceptable terms or at all, and any

failure to do so may materially adversely affect our ability to continue operations.

GlucoTrack®

model DF-F may not be approved for sale in the United States or other (non-CE Mark) jurisdictions.

will likely be required to undertake significant clinical trials to demonstrate to the FDA that the GlucoTrack®

is either safe and effective for its intended use or is substantially equivalent in terms of safety and effectiveness to an existing,

lawfully marketed non-Section 515 premarket approval (PMA) device (refer to “

Management Discussion and Analysis - Government

Regulatory ”).

may not be approved for sale in the United States or other (non-CE Mark) jurisdictions.

will likely be required to undertake significant clinical trials to demonstrate to the FDA that GlucoTrack®

safe and effective for its intended use or is substantially equivalent in terms of safety and effectiveness to an existing, lawfully

marketed non-Section 515 premarket approval (PMA) device (refer to “

Management Discussion and Analysis - Government Regulatory ”).

We may also be required to undertake clinical trials by non-U.S.

regulatory agencies in non-CE Mark jurisdictions.

Clinical trials are expensive and uncertain processes that may take years to complete.

Failure can occur at any point in the process

and early positive results do not ensure that the entire clinical trial will be successful.

Product candidates in clinical trials

may fail to show desired efficacy and safety traits despite early promising results.

A number of companies in the medical device

industry have suffered significant setbacks in advanced clinical trials, even after their product candidates demonstrated promising

results at earlier points.

results from the limited pre-clinical trials and safety and performance clinical trial that we have conducted should not be relied

upon as evidence that later-stage or large-scale clinical trials will succeed.

These trials involved limited patient populations

and there is no assurance that the experimental protocol or protocols, as the case may be, used in these informal trials will

be methodologically similar to ones submitted to the FDA or any other regulatory body for its approval.

Because of the sample

size, possible variation in methodology, differences in exclusion/inclusion criteria, or differences in endpoints, the results

of these pre-clinical trials may not be indicative of future results.

We will likely be required to demonstrate through well-controlled

clinical trials that the GlucoTrack®

model DF-F or future product candidates, if any, are safe and effective for their intended

Clinical trials are

expensive and uncertain processes that may take years to complete.

Failure can occur at any point in the process and early positive results

do not ensure that the entire clinical trial will be successful.

Product candidates in clinical trials may fail to show desired efficacy

and safety traits despite early promising results.

A number of companies in the medical device industry have suffered significant setbacks

in advanced clinical trials, even after their product candidates demonstrated promising results at earlier points.

results from the limited pre-clinical trials and safety and performance clinical trial that we have conducted should not be relied upon

as evidence that later-stage or large-scale clinical trials will succeed.

These trials involved limited patient populations and there

is no assurance that the experimental protocol or protocols, as the case may be, used in these informal trials will be methodologically

similar to ones submitted to the FDA or any other regulatory body for its approval.

Because of the sample size, possible variation in

methodology, differences in exclusion/inclusion criteria, or differences in endpoints, the results of these pre-clinical trials may not

be indicative of future results.

We will likely be required to demonstrate through well-controlled clinical trials that GlucoTrack®

or future product candidates, if any, are safe and effective for their intended uses.

In the event that the FDA deems GlucoTrack®

model DF-F to be a Class II device, which we do not believe is likely at

this point, then we would be required to demonstrate that it is substantially equivalent in terms of safety and effectiveness

to a device lawfully marketed either through a premarket notification or prior to May 28, 1976.

to be a Class II device, which we do not believe is likely at this point, then we would be required to demonstrate that it

is substantially equivalent in terms of safety and effectiveness to a device lawfully marketed either through a premarket notification

or prior to May 28, 1976.

Additionally,

although we have received our CE Mark approval for the GlucoTrack®

model DF-F non-invasive glucose monitoring device, EU member

countries may request or require additional performance and/or safety data from time to time, on a case-by-case basis.

also received final approval from South Korea to commence sales of the GlucoTrack®

model DF-F in South Korea.

the GlucoTrack®

model DF-F or our future product candidates, if any, may not be cleared or approved, as the case may be, even

if the clinical data are satisfactory and support, in our view, its or their clearance or approval.

although we have received our CE Mark approval for GlucoTrack®

1.0, EU member countries may request or require additional

performance and/or safety data from time to time, on a case-by-case basis.

GlucoTrack®

2.0 is currently under development.

Further, GlucoTrack®

or our future product candidates, if any, may not be cleared or approved, as the case may be, even if

the clinical data are satisfactory and support, in our view, its or their clearance or approval.

The FDA or other non-U.S.

regulatory authorities may disagree with our trial design or interpretation of the clinical data.

In addition, any of these regulatory

authorities may change requirements for the clearance or approval of a product candidate even after reviewing and providing comment

on a protocol for a pivotal clinical trial that has the potential to result in FDA approval.

In addition, any of these regulatory

authorities may also clear or approve a product candidate for fewer or more limited uses than we request or may grant clearance

or approval contingent on the performance of costly post-marketing clinical trials.

In addition, the FDA or other non-regulatory

authorities may not approve the labeling claims necessary or desirable for the successful commercialization of the GlucoTrack®

model DF-F or our future product candidates, if any.

are highly dependent on the success of our initial product candidate, the GlucoTrack®

model DF-F, and cannot give any assurance

that it will receive regulatory approval or clearance or be successfully commercialized.

are highly dependent on the success of our initial product candidate, the GlucoTrack®

We cannot give any assurance

that the FDA will permit us to clinically test the device, nor can we give any assurance that the clinical trials will be successful

or that the GlucoTrack®

model DF-F will receive regulatory clearance or approval or be successfully commercialized, for a

number of reasons, including, without limitation, the potential introduction by our competitors of more clinically-effective or

cost-effective alternatives, failure in our sales and marketing efforts, or the failure to obtain positive coverage determinations

or reimbursement.

Any failure to obtain approval to conduct clinical trials, favorable clinical data, clearance or approval of

or to successfully commercialize the GlucoTrack®

model DF-F would have a material adverse effect on our business.

authorities may disagree with our trial design or interpretation of the clinical data.

In addition, any of these regulatory authorities

may change requirements for the clearance or approval of a product candidate even after reviewing and providing comment on a protocol

for a pivotal clinical trial that has the potential to result in FDA approval.

In addition, any of these regulatory authorities may also

clear or approve a product candidate for fewer or more limited uses than we request or may grant clearance or approval contingent on

the performance of costly post-marketing clinical trials.

In addition, the FDA or other non-regulatory authorities may not approve the

labeling claims necessary or desirable for the successful commercialization of GlucoTrack®

or our future product candidates,

are highly dependent on the success of our next generation product candidate, GlucoTrack®

2.0, and cannot give any

assurance that it will receive regulatory approval or clearance or be successfully commercialized.

are highly dependent on the success of our next generation product candidate, GlucoTrack®

give any assurance that the FDA will permit us to clinically test the device, nor can we give any assurance that the clinical trials

will be successful or that GlucoTrack®

2.0 will receive regulatory clearance or approval or be successfully

commercialized, for a number of reasons, including, without limitation, the potential introduction by our competitors of more

clinically-effective or cost-effective alternatives, failure in our sales and marketing efforts, or the failure to obtain positive

coverage determinations or reimbursement.

Any failure to obtain approval to conduct clinical trials, favorable clinical data,

clearance or approval of or to successfully commercialize GlucoTrack®

2.0 would have a material adverse effect on our

our competitors develop and market products that are more effective, safer or less expensive than GlucoTrack®

model DF-F or

our future product candidates, if any, our commercial opportunities will be adversely affected.

or our future

product candidates, if any, our commercial opportunities will be adversely affected.

life sciences industry is highly competitive and we face significant competition from many medical device companies that are researching

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also have significantly greater research and marketing capabilities than us.

Some of the medical device companies that we expect

to compete with include Roche;

Some of the medical device companies that we expect to compete

with include Roche;

LifeScan, Inc., a division of Johnson & Johnson;

the MediSense and TheraSense divisions of

Abbott Laboratories;

the MediSense and TheraSense divisions of Abbott Laboratories;

Ascensia, a spin off from Bayer Corporation;

and Medtronic, Inc.

In addition, many other universities and

private and public research institutions are or may become active in research involving blood glucose measurement devices.

In addition, many other universities and private

and public research institutions are or may become active in research involving blood glucose measurement devices.

believe that our ability to successfully compete will depend on, among other things:

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our competitors market products that are more effective, safer, easier to use or less expensive than GlucoTrack®

or our future product candidates, if any, or that reach the market sooner than GlucoTrack®

model DF-F or our future product

candidates, if any, we may not achieve commercial success.

In addition, the medical device industry is characterized by rapid

technological change.

future product candidates, if any, or that reach the market sooner than GlucoTrack®

or our future product candidates,

if any, we may not achieve commercial success.

In addition, the medical device industry is characterized by rapid technological change.

It may be difficult for us to stay abreast of the rapid changes in each technology.

If we fail to stay at

the forefront of technological change, we may be unable to compete effectively.

Technological advances or products developed by

our competitors may render our technologies or product candidates obsolete or less competitive.

If we fail to stay at the forefront of technological

change, we may be unable to compete effectively.

Technological advances or products developed by our competitors may render our technologies

or product candidates obsolete or less competitive.

product development activities could be delayed or stopped.

do not know whether our future clinical trials will begin on time, or at all, and whether ongoing and/or future clinical trials

will be completed on schedule, or at all.

do not know whether our future clinical trials will begin on time, or at all, and whether ongoing and/or future clinical trials will

be completed on schedule, or at all.

commencement of future clinical trials could be substantially delayed or prevented by several factors, including:

failure to obtain sufficient funding to pay for all necessary clinical trials;

number of, and competition for, suitable patients that meet the protocol’s inclusion criteria and do not meet any of

the exclusion criteria;

number of, and competition for, suitable sites to conduct the clinical trials, and delay or failure to obtain FDA approval,

if necessary, to commence a clinical trial;

number of, and competition for, suitable patients that meet the protocol’s inclusion criteria and do not meet any of the exclusion

number of, and competition for, suitable sites to conduct the clinical trials, and delay or failure to obtain FDA approval, if necessary,

to commence a clinical trial;

or failure to obtain sufficient supplies of the product candidate for clinical trials;

to provide the medical device required in clinical trials at cost, which may require significant expenditures that we are

unable or unwilling to make;

or failure to reach agreement on acceptable clinical trial agreement terms or clinical trial protocols with prospective sites

or investigators;

or failure to obtain IRB approval or renewal of such approval to conduct a clinical trial at a prospective or accruing site,

respectively.

completion of clinical trials in connection with our application for FDA approval could also be substantially delayed or prevented

by several factors, including:

to provide the medical device required in clinical trials at cost, which may require significant expenditures that we are unable

or unwilling to make;

or failure to reach agreement on acceptable clinical trial agreement terms or clinical trial protocols with prospective sites or

investigators;

or failure to obtain IRB approval or renewal of such approval to conduct a clinical trial at a prospective or accruing site, respectively.

completion of clinical trials in connection with our application for FDA approval could also be substantially delayed or prevented by

several factors, including:

than expected rates of patient recruitment and enrollment;

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to monitor patients adequately during or after treatment.

clinical trials may be suspended or terminated at any time by the FDA, other regulatory authorities, the IRB for any given site,

clinical trials may be suspended or terminated at any time by the FDA, other regulatory authorities, the IRB for any given site, or us.

Any failure or significant delay in completing clinical trials for GlucoTrack®

or future product candidates, if any,

could materially harm our financial results and the commercial prospects for our product candidates.

or future product candidates, if any, could materially

harm our financial results and the commercial prospects for our product candidates.

regulatory approval process is expensive, time-consuming and uncertain and may prevent us from obtaining approvals for the commercialization

of GlucoTrack®

model DF-F or our future product candidates, if any.

or our future product candidates, if any.

research, testing, manufacturing, labeling, approval, selling, marketing and distribution of medical devices are subject to extensive

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regulatory authorities, which regulations differ from country to country.

permitted to market our product candidates in the United States until we receive a clearance letter under the 510(k)-premarket

notification process or approval of a Section 515 premarket approval, from the FDA, depending on the nature of the device.

have not submitted an application or premarket notification for or received marketing clearance or approval for any of our product

Obtaining approval of any premarket approval can be a lengthy, expensive and uncertain process.

While the FDA normally

reviews, and clears a premarket notification in three months, there is no guarantee that our products will qualify for this more

expeditious regulatory process, which is reserved for Class I and II devices, nor is there any assurance that, even if a device

is reviewed under the 510(k)-premarket notification process, the FDA will review it expeditiously or determine that the device

is substantially equivalent to a lawfully marketed non-premarket approval device.

If the FDA fails to make this finding, then

we cannot market the device.

In lieu of acting on a premarket notification, the FDA may seek additional information or additional

data which would further delay our ability to market the product.

In addition, failure to comply with FDA, non-U.S.

authorities or other applicable U.S.

regulatory requirements may, either before or after product clearance or approval,

if any, subject us to administrative or judicially imposed sanctions, including:

We are not permitted

to market our product candidates in the United States until we receive a clearance letter under the 510(k)-premarket notification process

or approval of a Section 515 premarket approval, from the FDA, depending on the nature of the device.

We have not submitted an application

or premarket notification for or received marketing clearance or approval for any of our product candidates.

Obtaining approval of any

premarket approval can be a lengthy, expensive and uncertain process.

While the FDA normally reviews, and clears a premarket notification

in three months, there is no guarantee that our products will qualify for this more expeditious regulatory process, which is reserved

for Class I and II devices, nor is there any assurance that, even if a device is reviewed under the 510(k)-premarket notification process,

the FDA will review it expeditiously or determine that the device is substantially equivalent to a lawfully marketed non-premarket approval

If the FDA fails to make this finding, then we cannot market the device.

In lieu of acting on a premarket notification, the FDA

may seek additional information or additional data which would further delay our ability to market the product.

In addition, failure

to comply with FDA, non-U.S.

regulatory authorities or other applicable U.S.

regulatory requirements may, either before

or after product clearance or approval, if any, subject us to administrative or judicially imposed sanctions, including:

on the products, manufacturers or manufacturing process;

inspectional observations (Form 483), warning letters or non-warning letters incorporating inspectional observations, i.e.,

so-called “untitled letter”;

inspectional observations (Form 483), warning letters or non-warning letters incorporating inspectional observations, i.e., so-called

“untitled letter”;

and criminal penalties;

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to clear or approve pending applications or premarket notifications.

approval of a PMA or PMA supplement or clearance pursuant to a 510(k)-premarket notification is not guaranteed, and the approval

or clearance process, as the case may be, is expensive and may, especially in the case of the PMA, take several years.

also has substantial discretion in the medical device clearance or approval processes.

Despite the time and expense exerted, failure

can occur at any stage and we could encounter problems that cause us to abandon clinical trials or to repeat or perform additional

pre-clinical studies and clinical trials.

The number of pre-clinical studies and clinical trials that will be required for FDA

clearance or approval varies depending on the medical device candidate, the disease or condition that the medical device candidate

is designed to address, and the regulations applicable to any particular medical device candidate.

The FDA can delay, limit or

deny clearance or approval of a medical device candidate for many reasons, including:

approval of a PMA or PMA supplement or clearance pursuant to a 510(k)-premarket notification is not guaranteed, and the approval or clearance

process, as the case may be, is expensive and may, especially in the case of the PMA, take several years.

The FDA also has substantial

discretion in the medical device clearance or approval processes.

Despite the time and expense exerted, failure can occur at any stage

and we could encounter problems that cause us to abandon clinical trials or to repeat or perform additional pre-clinical studies and

clinical trials.

The number of pre-clinical studies and clinical trials that will be required for FDA clearance or approval varies depending

on the medical device candidate, the disease or condition that the medical device candidate is designed to address, and the regulations

applicable to any particular medical device candidate.

The FDA can delay, limit or deny clearance or approval of a medical device candidate

for many reasons, including:

medical device candidate may not be deemed safe or effective, in the case of a PMA;

medical device candidate may not be deemed to be substantially equivalent to a lawfully marketed non-premarket approval device

in the case of a 510(k)-premarket notification;

medical device candidate may not be deemed to be substantially equivalent to a lawfully marketed non-premarket approval device in

the case of a 510(k)-premarket notification;

officials may not find the data from the clinical trials sufficient;

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FDA may change its clearance or approval policies or adopt new regulations.

while we have received CE Mark approval for the GlucoTrack®

model DF-F, the MDD requires only minimum harmonization.

uniform regulation throughout the EU is not ensured.

Rather, member countries may apply and enforce the MDD’s terms differently,

and certain EU member countries may request or require performance and/or safety data additional to the MDD’s requirements

from time to time, on a case-by-case basis.

Therefore, we cannot predict whether we will be able to successfully commercialize

the GlucoTrack®

model DF-F or our future product candidates, if any, in the EU.

while we have received CE Mark approval for GlucoTrack®

1.0, the MDD requires only minimum harmonization.

In practice, uniform

regulation throughout the EU is not ensured.

Rather, member countries may apply and enforce the MDD’s terms differently, and certain

EU member countries may request or require performance and/or safety data additional to the MDD’s requirements from time to time,

on a case-by-case basis.

Therefore, we cannot predict whether we will be able to successfully commercialize GlucoTrack®

or our future product candidates, if any, in the EU.

to recruit and enroll patients for clinical trials may cause the development of our product candidates to be delayed.

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Patient enrollment

depends on many factors, including the size of the patient population, the nature of the protocol, the proximity of patients to

clinical sites and the eligibility criteria for the trial.

depends on many factors, including the size of the patient population, the nature of the protocol, the proximity of patients to clinical

sites and the eligibility criteria for the trial.

Delays in patient enrollment are not unusual.

Any such delays in planned

patient enrollment may result in increased costs, which could harm our ability to develop products.

Any such delays in planned patient enrollment

may result in increased costs, which could harm our ability to develop products.

terms of clearances or approvals and ongoing regulation of our products may limit how we manufacture and market our product candidates,

which could materially impair our ability to generate anticipated revenues.

regulatory clearance or approval has been granted, the cleared or approved product and its manufacturer are subject to continual

regulatory clearance or approval has been granted, the cleared or approved product and its manufacturer are subject to continual review.

Any cleared or approved product may only be promoted for its indicated uses.

In addition, if the FDA or other non-U.S.

regulatory authorities clear or approve GlucoTrack®

model DF-F or our future product candidates, if any, the labeling, packaging,

adverse event reporting, storage, advertising and promotion for the product will be subject to extensive regulatory requirements.

We, and the manufacturers of our products, if other than us, also will be required to comply with the FDA’s Quality System

Regulation, which includes requirements relating to quality control and quality assurance, as well as the corresponding maintenance

of records and documentation.

Moreover, device manufacturers are required to report adverse events by filing Medical Device Reports

with the FDA, which are publicly available.

Further, regulatory agencies must approve our manufacturing facilities before they

can be used to manufacture products, and these facilities are subject to ongoing regulatory inspection.

If we fail to comply with

the regulatory requirements of the FDA and other non-U.S.

regulatory authorities, or if previously unknown problems with our products,

manufacturers or manufacturing processes are discovered, we could be subject to administrative or judicially imposed sanctions,

regulatory authorities

clear or approve GlucoTrack®

or our future product candidates, if any, the labeling, packaging, adverse event reporting,

storage, advertising and promotion for the product will be subject to extensive regulatory requirements.

We, and the manufacturers of

our products, if other than us, also will be required to comply with the FDA’s Quality System Regulation, which includes requirements

relating to quality control and quality assurance, as well as the corresponding maintenance of records and documentation.

Moreover, device

manufacturers are required to report adverse events by filing Medical Device Reports with the FDA, which are publicly available.

regulatory agencies must approve our manufacturing facilities before they can be used to manufacture products, and these facilities are

subject to ongoing regulatory inspection.

If we fail to comply with the regulatory requirements of the FDA and other non-U.S.

authorities, or if previously unknown problems with our products, manufacturers or manufacturing processes are discovered, we could be

subject to administrative or judicially imposed sanctions, including:

on the products, manufacturers or manufacturing process;

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addition, the FDA and other non-U.S.

regulatory authorities, including the EU and each of the EU member countries individually,

may change their policies and additional regulations may be enacted that could prevent or delay regulatory clearance or approval

of our product candidates.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future

legislation or administrative action, either in the United States or abroad.

If we are not able to maintain regulatory compliance,

we will likely not be permitted to market future product candidates and may not achieve or sustain profitability.

if we receive regulatory clearance or approval to market the GlucoTrack®

model DF-F or our future product candidates, if any,

the market may not be receptive to our products.

regulatory authorities, including the EU and each of the EU member countries individually, may change

their policies and additional regulations may be enacted that could prevent or delay regulatory clearance or approval of our product

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative

action, either in the United States or abroad.

If we are not able to maintain regulatory compliance, we will likely not be permitted

to market future product candidates and may not achieve or sustain profitability.

if we receive regulatory clearance or approval to market GlucoTrack®

or our future product candidates, if any, the

market may not be receptive to our products.

if GlucoTrack®

model DF-F or our future product candidates, if any, obtain regulatory clearance or approval, resulting products

may not gain market acceptance among physicians, patients, health care payors or the medical community.

We believe that the degree

of market acceptance will depend on a number of factors, including:

or our future product candidates, if any, obtain regulatory clearance or approval, resulting products may

not gain market acceptance among physicians, patients, health care payors or the medical community.

We believe that the degree of market

acceptance will depend on a number of factors, including:

of market introduction of competitive products;

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the GlucoTrack®

model DF-F or our future product candidates, if any, fail to achieve market acceptance, we may not be able

to generate significant revenue or achieve or sustain profitability.

or our future product candidates, if any, fail to achieve market acceptance, we may not be able to generate

significant revenue or achieve or sustain profitability.

coverage and reimbursement status of newly cleared or approved medical devices is uncertain, and failure to obtain adequate coverage

and adequate reimbursement could limit our ability to market GlucoTrack®

model DF-F or future product candidates, if any,

and may inhibit our ability to generate revenue from GlucoTrack®

model DF-F or our future product candidates, if any, that

may be cleared or approved.

or future product candidates, if any, and may

inhibit our ability to generate revenue from GlucoTrack®

or our future product candidates, if any, that may be cleared

is significant uncertainty related to the third-party coverage and reimbursement of newly cleared or approved medical devices.

The commercial success of GlucoTrack®

model DF-F or our future product candidates, if any, in both domestic and international

markets will depend in part on the availability of coverage and adequate reimbursement from third-party payors, including government

payors, such as the Medicare and Medicaid programs, managed care organizations and other third-party payors.

Government and other

third-party payors are increasingly attempting to contain health care costs by limiting both coverage and the level of reimbursement

for new products and, as a result, they may not cover or provide adequate payment for GlucoTrack®

model DF-F or our future

product candidates, if any.

These payors may conclude that our products are not as safe or effective as existing devices or that

the overall cost of using one of our devices exceeds the overall cost of the competing device, and third-party payors may not

approve GlucoTrack®

model DF-F or our future product candidates, if any, for coverage and adequate reimbursement.

deficit reduction and austerity measures in the United States and abroad may put further pressure on governments to limit coverage

of, and reimbursement for, our products.

The failure to obtain coverage and adequate reimbursement for GlucoTrack®

or our future product candidates, if any, or health care cost containment initiatives that limit or restrict reimbursement for

such products may reduce any future product revenue.

The commercial

success of GlucoTrack®

or our future product candidates, if any, in both domestic and international markets will depend

in part on the availability of coverage and adequate reimbursement from third-party payors, including government payors, such as the

Medicare and Medicaid programs, managed care organizations and other third-party payors.

Government and other third-party payors are

increasingly attempting to contain health care costs by limiting both coverage and the level of reimbursement for new products and, as

a result, they may not cover or provide adequate payment for GlucoTrack®

or our future product candidates, if any.

payors may conclude that our products are not as safe or effective as existing devices or that the overall cost of using one of our devices

exceeds the overall cost of the competing device, and third-party payors may not approve GlucoTrack®

or our future product

candidates, if any, for coverage and adequate reimbursement.

Furthermore, deficit reduction and austerity measures in the United States

and abroad may put further pressure on governments to limit coverage of, and reimbursement for, our products.

The failure to obtain coverage

and adequate reimbursement for GlucoTrack®

or our future product candidates, if any, or health care cost containment initiatives

that limit or restrict reimbursement for such products may reduce any future product revenue.

may not obtain insurance coverage to adequately cover all significant risk exposures.

will be exposed to liabilities that are unique to the products we provide.

We currently maintain premises insurance and there

can be no assurance that we will acquire or maintain insurance for certain risks, that the amount of our insurance coverage will

be adequate to cover all claims or liabilities, or that we will not be forced to bear substantial costs resulting from risks and

uncertainties of business.

We currently maintain premises insurance and there can be

no assurance that we will acquire or maintain insurance for certain risks, that the amount of our insurance coverage will be adequate

to cover all claims or liabilities, or that we will not be forced to bear substantial costs resulting from risks and uncertainties of

It is also not possible to obtain insurance to protect against all operational risks and liabilities.

The failure to obtain adequate insurance coverage on terms favorable to us, or at all, could have a material adverse effect on

our business, financial condition and results of operations.

The failure to obtain

adequate insurance coverage on terms favorable to us, or at all, could have a material adverse effect on our business, financial condition

and results of operations.

product liability lawsuits are brought against us, we may incur substantial liabilities.

face a potential risk of product liability as a result of any of the products that we offer for sale.

For example, we may be sued

if any product we sell allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing

Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to

warn of dangers inherent in the product, negligence, strict liability and a breach of warranties.

Claims could also be asserted

under state consumer protection acts.

If we cannot successfully defend ourselves against product liability claims, we may incur

substantial liabilities.

Even successful defense would require significant financial and management resources.

Regardless of the

merits or eventual outcome, liability claims may result in:

For example, we may be sued if

any product we sell allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or

Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of

dangers inherent in the product, negligence, strict liability and a breach of warranties.

Claims could also be asserted under state consumer

protection acts.

If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities.

successful defense would require significant financial and management resources.

Regardless of the merits or eventual outcome, liability

claims may result in:

demand for products that we may offer for sale;

5 unchanged sentences

decline in our stock price.

inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product

liability claims could prevent or inhibit the commercialization of products we develop.

We currently maintain product liability

insurance up to $5,000,000 per claim and in the aggregate.

Although we have product liability coverage, we may have to pay amounts

awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance,

and we may not have, or be able to obtain, sufficient capital to pay such amounts.

we fail to attract and retain key management and scientific personnel, we may be unable to successfully develop or commercialize

the GlucoTrack®

model DF-F or our future product candidates, if any.

will need to expand and effectively manage our managerial, operational, financial, development and other resources in order to

successfully pursue our research, development and commercialization efforts for GlucoTrack®

model DF-F or our future product

candidates, if any.

Our success depends on our continued ability to attract, retain and motivate highly qualified management and

pre-clinical and clinical personnel.

The loss of the services of any of our senior management could delay or prevent the development

or commercialization of GlucoTrack®

model DF-F or our future product candidates, if any.

At present, we do not have key man

insurance policies with respect to any of our employees.

We will need to hire additional personnel as we continue to expand our

research and development activities and build a sales and marketing function.

Although we currently have an employment

agreement with Mr.

Malka, the agreement provides that it may be terminated by Mr.

Malka upon 90 days written

notice to us.

may not be able to attract or retain qualified management and scientific personnel in the future due to the intense competition

for qualified personnel among medical device and other businesses.

If we are not able to attract and retain the necessary personnel

to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our research

and development objectives, our ability to raise additional capital and our ability to implement our business strategy.

In particular,

if we lose any members of our senior management team, we may not be able to find suitable replacements in a timely fashion or

at all and our business may be harmed as a result.

we continue to evolve from a company primarily involved in development to a company also involved in commercialization, we may

encounter difficulties in managing our growth and expanding our operations successfully.

the GlucoTrack®

model DF-F has received a CE Mark, we have begun to expand our manufacturing, marketing and sales capabilities

by contracting with third parties to provide these capabilities.

We anticipate that, as our operations expand, we will need to

manage additional relationships with such third parties.

Maintaining these relationships and managing our future growth will impose

significant added responsibilities on members of our management.

inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability

claims could prevent or inhibit the commercialization of products we develop.

We currently maintain product liability insurance up to

$5,000 thousand per claim and in the aggregate.

Although we have product liability coverage, we may have to pay amounts awarded by a

court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have,

or be able to obtain, sufficient capital to pay such amounts.

we fail to attract and retain key management and scientific personnel, we may be unable to successfully develop or commercialize GlucoTrack®

or our future product candidates, if any.

will need to expand and effectively manage our managerial, operational, financial, development and other resources in order to successfully

pursue our research, development and commercialization efforts for GlucoTrack®

or our future product candidates, if any.

depends on our continued ability to attract, retain and motivate highly qualified management and pre-clinical and clinical personnel.

The loss of the services of any of our senior management could delay or prevent the development or commercialization of GlucoTrack®

or our future product candidates, if any.

At present, we do not have key man insurance policies with respect to any of our employees.

We will need to hire additional personnel as we continue to expand our research and development activities and build a sales and marketing

may not be able to attract or retain qualified management and scientific personnel in the future due to the intense competition for qualified

personnel among medical device and other businesses.

If we are not able to attract and retain the necessary personnel to accomplish our

business objectives, we may experience constraints that will significantly impede the achievement of our research and development objectives,

our ability to raise additional capital and our ability to implement our business strategy.

In particular, if we lose any members of

our senior management team, we may not be able to find suitable replacements in a timely fashion or at all and our business may be harmed

we continue to evolve from a company primarily involved in development to a company also involved in commercialization, we may encounter

difficulties in managing our growth and expanding our operations successfully.

We anticipate that, as our operations

expand, we will need to expand our manufacturing, marketing and sales capabilities by contracting with third parties.

Maintaining these relationships and managing our future growth will impose significant added responsibilities

on members of our management.

We must be able to manage our development efforts effectively;

manage our clinical trials effectively;

hire, train and integrate additional management, development, administrative and sales

and marketing personnel;

improve managerial, development, operational and finance systems;

and expand our facilities, all of which

may impose a strain on our administrative and operational infrastructure.

hire, train and integrate additional management, development, administrative and sales and marketing personnel;

improve managerial, development,

operational and finance systems;

and expand our facilities, all of which may impose a strain on our administrative and operational infrastructure.

rely on third parties to manufacture and supply our product.

do not own or operate manufacturing facilities for clinical or commercial production of the GlucoTrack®

model DF-F, other

than a prototype lab.

We have no experience in medical device manufacturing and lack the resources and the capability to manufacture

the GlucoTrack®

model DF-F on a commercial scale.

We currently manufacture the GlucoTrack®

model DF-F with a third-party

manufacturer in Israel.

our manufacturing partners are unable to produce our products in the amounts, timing or pricing that we require, we may not be

able to establish a contract and obtain a sufficient alternative supply from another supplier on a timely basis and in the quantities

or pricing we require.

do not own or operate manufacturing facilities for clinical or commercial production of GlucoTrack®, other than a prototype lab.

We have no experience in medical device manufacturing and lack the resources and the capability to manufacture the GlucoTrack®

a commercial scale.

To date we have manufactured GlucoTrack®

with a third-party manufacturer in Israel.

our manufacturing partners are unable to produce our products in the amounts, timing or pricing that we require, we may not be able to

establish a contract and obtain a sufficient alternative supply from another supplier on a timely basis and in the quantities or pricing

We expect to depend on third-party contract manufacturers for the foreseeable future.

GlucoTrack®

model DF-F does, and our future product candidates, if any, likely will require precise, high quality manufacturing.

Any of our contract manufacturers will be subject to ongoing periodic unannounced inspections by the FDA and other non-U.S.

authorities to ensure strict compliance with quality system regulations, including current good manufacturing practices and other

applicable government regulations and corresponding standards.

If our contract manufacturers fail to achieve and maintain high

manufacturing standards in compliance with quality system regulations, we may experience manufacturing errors resulting in patient

injury or death, product recalls or withdrawals, delays or interruptions of production or failures in product testing or delivery,

delay or prevention of filing or approval of marketing applications for our products, cost overruns or other problems that could

seriously harm our business.

performance failure on the part of our contract manufacturers could delay clinical development or regulatory clearance or approval

of our product candidates or commercialization of our future product candidates, depriving us of potential product revenue and

resulting in additional losses.

In addition, our dependence on a third-party for manufacturing may adversely affect our future

profit margins.

Our ability to replace an existing manufacturer may be difficult because the number of potential manufacturers

is limited and the FDA must approve any replacement manufacturer before it can begin manufacturing our product candidates.

approval would require additional non-clinical testing and compliance inspections.

It may be difficult or impossible for us to

identify and engage a replacement manufacturer on acceptable terms in a timely manner, or at all.

and our future product candidates, if any, likely will require precise, high quality manufacturing.

Any of our contract manufacturers

will be subject to ongoing periodic unannounced inspections by the FDA and other non-U.S.

regulatory authorities to ensure strict compliance

with quality system regulations, including current good manufacturing practices and other applicable government regulations and corresponding

If our contract manufacturers fail to achieve and maintain high manufacturing standards in compliance with quality system

regulations, we may experience manufacturing errors resulting in patient injury or death, product recalls or withdrawals, delays or interruptions

of production or failures in product testing or delivery, delay or prevention of filing or approval of marketing applications for our

products, cost overruns or other problems that could seriously harm our business.

performance failure on the part of our contract manufacturers could delay clinical development or regulatory clearance or approval of

our product candidates or commercialization of our future product candidates, depriving us of potential product revenue and resulting

in additional losses.

In addition, our dependence on a third-party for manufacturing may adversely affect our future profit margins.

Our ability to replace an existing manufacturer may be difficult because the number of potential manufacturers is limited and the FDA

must approve any replacement manufacturer before it can begin manufacturing our product candidates.

Such approval would require additional

non-clinical testing and compliance inspections.

It may be difficult or impossible for us to identify and engage a replacement manufacturer

on acceptable terms in a timely manner, or at all.

are dependent on third-party distributors to market and sell our products.

have limited internal marketing, sales or distribution capabilities and currently we do not intend to develop extensive internal

marketing, sales or distribution capabilities in the future.

Rather, we intend to utilize third-party distributors to market our

products, and have entered into exclusive distribution agreements with respect to certain territories.

There is no assurance that

third party distributors will achieve acceptable levels of sales or that, if any of our existing arrangements expire or terminate,

we will be able to replace any distributors on terms advantageous to us, or at all.

Further, there is no assurance that we will

be able to expand our distribution network by adding additional distributors.

If third party distributors cease to promote our

products, or if we are unable to make acceptable arrangements with distributors or sales personnel in other markets, our business

prospects, operating results or financial condition could be materially adversely affected.

clinical investigators and contract research organizations that we engage to conduct our clinical trials may not be diligent,

careful or timely.

have limited internal marketing, sales or distribution capabilities and currently we do not intend to develop extensive internal marketing,

sales or distribution capabilities in the future.

Rather, we intend to utilize third-party distributors to market our products, and have

entered into exclusive distribution agreements with respect to certain territories.

There is no assurance that third party distributors

will achieve acceptable levels of sales or that, if any of our existing arrangements expire or terminate, we will be able to replace

any distributors on terms advantageous to us, or at all.

Further, there is no assurance that we will be able to expand our distribution

network by adding additional distributors.

If third party distributors cease to promote our products, or if we are unable to make acceptable

arrangements with distributors or sales personnel in other markets, our business prospects, operating results or financial condition

could be materially adversely affected.

clinical investigators and contract research organizations that we engage to conduct our clinical trials may not be diligent, careful

will depend on independent clinical investigators to conduct our clinical trials.

Contract research organizations may also assist

us in the collection and analysis of data.

These investigators and contract research organizations will not be our employees and

we will not be able to control, other than by contract, the amount of resources, including time that they devote to products that

If independent investigators fail to devote sufficient resources to the clinical trials, or if their performance is

substandard, it will delay the approval or clearance and commercialization of any products that we develop.

Further, the FDA requires

that we comply with standards, commonly referred to as good clinical practice, for conducting, recording and reporting clinical

trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of

trial subjects are protected.

If our independent clinical investigators and contract research organizations fail to comply with

good clinical practice, the results of our clinical trials could be called into question and the clinical development of our product

candidates could be delayed.

Failure of clinical investigators or contract research organizations to meet their obligations to

us or comply with federal regulations could adversely affect the clinical development of our product candidates and harm our business.

Contract research organizations may also assist us

in the collection and analysis of data.

These investigators and contract research organizations will not be our employees and we will

not be able to control, other than by contract, the amount of resources, including time that they devote to products that we develop.

If independent investigators fail to devote sufficient resources to the clinical trials, or if their performance is substandard, it will

delay the approval or clearance and commercialization of any products that we develop.

Further, the FDA requires that we comply with

standards, commonly referred to as good clinical practice, for conducting, recording and reporting clinical trials to assure that data

and reported results are credible and accurate and that the rights, integrity and confidentiality of trial subjects are protected.

our independent clinical investigators and contract research organizations fail to comply with good clinical practice, the results of

our clinical trials could be called into question and the clinical development of our product candidates could be delayed.

clinical investigators or contract research organizations to meet their obligations to us or comply with federal regulations could adversely

affect the clinical development of our product candidates and harm our business.

we are unable to obtain and enforce patent protection for our products, our business could be materially harmed.

success depends, among other things, on our ability to protect proprietary methods and technologies that we develop under the

patent and other intellectual property laws of the United States and other countries, so that we can prevent others from unlawfully

using our inventions and proprietary information.

However, we may not hold proprietary rights to some patents required for us

to commercialize proposed products.

For this and other reasons, we may be unable to secure desired patent rights, thereby losing

desired exclusivity.

Although we do not believe that we need any licenses for the GlucoTrack®

model DF-F, we may need to obtain

licenses in the future for other products or in certain circumstances, such as if one of our patents were declared invalid in

If such licenses are not available to us on acceptable terms, we will not be able to market the affected products

or conduct the desired activities, unless we successfully challenge the validity, enforceability or infringement of the third-party

patent or otherwise circumvent the third-party patent.

success depends, among other things, on our ability to protect proprietary methods and technologies that we develop under the patent

and other intellectual property laws of the United States and other countries, so that we can prevent others from unlawfully using our

inventions and proprietary information.

However, we may not hold proprietary rights to some patents required for us to commercialize

proposed products.

For this and other reasons, we may be unable to secure desired patent rights, thereby losing desired exclusivity.

Although we do not believe that we need any licenses for GlucoTrack®, we may need to obtain licenses in the future

for other products or in certain circumstances, such as if one of our patents were declared invalid in the future.

If such licenses are

not available to us on acceptable terms, we will not be able to market the affected products or conduct the desired activities, unless

we successfully challenge the validity, enforceability or infringement of the third-party patent or otherwise circumvent the third-party

strategy depends on our ability to rapidly identify and seek patent protection for our discoveries.

The process of obtaining patent

protection is expensive and time-consuming.

Despite our efforts to protect our proprietary rights, unauthorized parties may be

able to obtain and use information that we regard as proprietary.

The process of obtaining patent protection

is expensive and time-consuming.

Despite our efforts to protect our proprietary rights, unauthorized parties may be able to obtain and

use information that we regard as proprietary.

issuance of a patent does not guarantee that it is valid or enforceable.

Any patents we have obtained, or which we may obtain

in the future, may be challenged, invalidated, unenforceable or circumvented.

Moreover, the United States Patent and Trademark

Office (the “USPTO”) may commence interference proceedings involving our patents or patent applications.

Any challenge

to, finding of unenforceability or invalidation or circumvention of our patents or patent applications would be costly, would

require significant time and attention of our management and could have a material adverse effect on our business.

court decisions may introduce uncertainty in the enforceability or scope of patents owned by medical device companies.

Any patents we have obtained, or which we may obtain in the

future, may be challenged, invalidated, unenforceable or circumvented.

Moreover, the United States Patent and Trademark Office (the “USPTO”)

may commence interference proceedings involving our patents or patent applications.

Any challenge to, finding of unenforceability or

invalidation or circumvention of our patents or patent applications would be costly, would require significant time and attention of

our management and could have a material adverse effect on our business.

In addition, court decisions may introduce uncertainty in the

enforceability or scope of patents owned by medical device companies.

pending patent applications may not result in issued patents.

The patent position of medical device companies, including us, is

generally uncertain and involves complex legal and factual considerations.

The standards that the USPTO and its foreign counterparts

use to grant patents are not always applied predictably or uniformly and can change.

There is also no uniform, worldwide policy

regarding the subject matter and scope of claims granted or allowable in medical device patents.

Accordingly, we do not know the

degree of future protection for our proprietary rights or the breadth of claims that will be allowed in any patents issued to

us or to others.

The legal systems of certain countries do not favor the aggressive enforcement of patents, and the laws of foreign

countries may not protect our rights to the same extent as the laws of the United States.

Therefore, the enforceability or scope

of our patents in the United States or in foreign countries cannot be predicted with certainty, and, as a result, any patents

that we own may not provide sufficient protection against competitors.

We may not be able to obtain or maintain patent protection

for our pending patent applications or those we may file in the future.

cannot assure you that any patents that will issue, that may issue or that may be licensed to us will be enforceable or valid

or will not expire prior to the commercialization of our product candidates, thus allowing others to more effectively compete

Therefore, any patents that we own may not adequately protect our product candidates or our future products.

we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products

could be adversely affected.

The patent position of medical device companies, including us, is generally

uncertain and involves complex legal and factual considerations.

The standards that the USPTO and its foreign counterparts use to grant

patents are not always applied predictably or uniformly and can change.

There is also no uniform, worldwide policy regarding the subject

matter and scope of claims granted or allowable in medical device patents.

Accordingly, we do not know the degree of future protection

for our proprietary rights or the breadth of claims that will be allowed in any patents issued to us or to others.

The legal systems

of certain countries do not favor the aggressive enforcement of patents, and the laws of foreign countries may not protect our rights

to the same extent as the laws of the United States.

Therefore, the enforceability or scope of our patents in the United States or in

foreign countries cannot be predicted with certainty, and, as a result, any patents that we own may not provide sufficient protection

against competitors.

We may not be able to obtain or maintain patent protection for our pending patent applications or those we may file

in the future.

cannot assure you that any patents that will issue, that may issue or that may be licensed to us will be enforceable or valid or will

not expire prior to the commercialization of our product candidates, thus allowing others to more effectively compete with us.

any patents that we own may not adequately protect our product candidates or our future products.

we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could

be adversely affected.

addition to patent protection, we also rely on other proprietary rights, including protection of trade secrets, know-how and confidential

and proprietary information.

To maintain the confidentiality of trade secrets and proprietary information, we will seek to enter

into confidentiality and non- disclosure agreements with our employees, consultants and collaborators upon the commencement of

their relationships with us.

These agreements generally require that all confidential information developed by the individual

or made known to the individual by us during the course of the individual’s relationship with us be kept confidential and

not disclosed to third parties.

Our agreements with employees also generally provide and will generally provide that any inventions

conceived by the individual in the course of rendering services to us shall be our exclusive property.

However, we may not obtain

these agreements in all circumstances, and individuals with whom we have these agreements may not comply with their terms.

the event of unauthorized use or disclosure of our trade secrets or proprietary information, these agreements, even if obtained,

may not provide meaningful protection, particularly for trade secrets or other confidential information.

To the extent that our

employees, consultants or contractors use technology or know-how owned by third parties in their work for us, disputes may arise

between us and those third parties as to the rights in related inventions.

To maintain the confidentiality of trade secrets and proprietary information, we will seek to enter into

confidentiality and non- disclosure agreements with our employees, consultants and collaborators upon the commencement of their relationships

These agreements generally require that all confidential information developed by the individual or made known to the individual

by us during the course of the individual’s relationship with us be kept confidential and not disclosed to third parties.

Our agreements

with employees also generally provide and will generally provide that any inventions conceived by the individual in the course of rendering

services to us shall be our exclusive property.

However, we may not obtain these agreements in all circumstances, and individuals with

whom we have these agreements may not comply with their terms.

In the event of unauthorized use or disclosure of our trade secrets or

proprietary information, these agreements, even if obtained, may not provide meaningful protection, particularly for trade secrets or

other confidential information.

To the extent that our employees, consultants or contractors use technology or know-how owned by third

parties in their work for us, disputes may arise between us and those third parties as to the rights in related inventions.

remedies may not exist in the event of unauthorized use or disclosure of our confidential information.

The disclosure of trade

secrets would impair our competitive position and may materially harm our business, financial condition and results of operations.

The disclosure of trade secrets

would impair our competitive position and may materially harm our business, financial condition and results of operations.

jurisdictions may require us to grant licenses to third parties.

Such compulsory licenses could be extended to include some of

our product candidates, which may limit potential revenue opportunities.

countries, including certain countries in Europe, have compulsory licensing laws under which a patent owner may be compelled to

grant licenses to third parties.

In addition, most countries limit the enforceability of patents against government agencies or

government contractors.

In these countries, the patent owner may be limited to monetary relief and may be unable to enjoin infringement,

which could materially diminish the value of the patent.

Compulsory licensing of life-saving products is also becoming increasingly

popular in developing countries, either through direct legislation or international initiatives.

Such compulsory licenses could

be extended to include some of our product candidates, which may limit our potential revenue opportunities.

commercial success depends significantly on our ability to operate without infringing the patents and other proprietary rights

of third parties.

entities may have or obtain patents or proprietary rights that could limit our ability to manufacture, use, sell, offer for sale

or import products or impair our competitive position.

In addition, to the extent that a third party develops new technology that

covers our products, we may be required to obtain licenses to that technology, which licenses may not be available on commercially

reasonable terms, if at all.

If licenses are not available on acceptable terms, we will not be able to market the affected products

or conduct the desired activities unless we successfully challenge the validity, enforceability or infringement of the third-party

patent or circumvent the third-party patent, which would be costly and would require significant time and attention of our management.

Third parties may have or obtain valid and enforceable patents or proprietary rights that could block us from developing products

using our technology.

Our failure to obtain a license to any technology that we require may materially harm our business, financial

condition and results of operations.

we become involved in patent litigation or other proceedings related to a determination of rights, we could incur substantial

costs and expenses, substantial liability for damages or be required to stop our product development and commercialization efforts.

Such compulsory licenses could be extended to include some of our product

candidates, which may limit potential revenue opportunities.

countries, including certain countries in Europe, have compulsory licensing laws under which a patent owner may be compelled to grant

licenses to third parties.

In addition, most countries limit the enforceability of patents against government agencies or government

In these countries, the patent owner may be limited to monetary relief and may be unable to enjoin infringement, which could

materially diminish the value of the patent.

Compulsory licensing of life-saving products is also becoming increasingly popular in developing

countries, either through direct legislation or international initiatives.

Such compulsory licenses could be extended to include some

of our product candidates, which may limit our potential revenue opportunities.

commercial success depends significantly on our ability to operate without infringing the patents and other proprietary rights of third

entities may have or obtain patents or proprietary rights that could limit our ability to manufacture, use, sell, offer for sale or import

products or impair our competitive position.

In addition, to the extent that a third party develops new technology that covers our products,

we may be required to obtain licenses to that technology, which licenses may not be available on commercially reasonable terms, if at

If licenses are not available on acceptable terms, we will not be able to market the affected products or conduct the desired activities

unless we successfully challenge the validity, enforceability or infringement of the third-party patent or circumvent the third-party

patent, which would be costly and would require significant time and attention of our management.

Third parties may have or obtain valid

and enforceable patents or proprietary rights that could block us from developing products using our technology.

Our failure to obtain

a license to any technology that we require may materially harm our business, financial condition and results of operations.

we become involved in patent litigation or other proceedings related to a determination of rights, we could incur substantial costs and

expenses, substantial liability for damages or be required to stop our product development and commercialization efforts.

parties may sue us for infringing their patent rights.

Likewise, we may need to resort to litigation to enforce a patent issued

or licensed to us or to determine the scope and validity of proprietary rights of others.

In addition, a third party may claim

that we have improperly obtained or used our confidential or proprietary information.

The cost to us of any litigation or other

proceeding relating to intellectual property rights, even if resolved in our favor, could be substantial, and the litigation would

divert management’s efforts.

Some of our competitors may be able to sustain the costs of complex patent litigation more

effectively than we can because they have substantially greater resources.

Uncertainties resulting from the initiation and continuation

of any litigation could limit our ability to continue our operations.

any parties successfully claim that our creation or use of proprietary technologies infringes upon their intellectual property

rights, we might be forced to pay damages, potentially including treble damages, if we are found to have willfully infringed on

such parties’

Likewise, we may need to resort to litigation to enforce a patent issued or licensed

to us or to determine the scope and validity of proprietary rights of others.

In addition, a third party may claim that we have improperly

obtained or used our confidential or proprietary information.

The cost to us of any litigation or other proceeding relating to intellectual

property rights, even if resolved in our favor, could be substantial, and the litigation would divert management’s efforts.

of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially

greater resources.

Uncertainties resulting from the initiation and continuation of any litigation could limit our ability to continue

our operations.

any parties successfully claim that our creation or use of proprietary technologies infringes upon their intellectual property rights,

we might be forced to pay damages, potentially including treble damages, if we are found to have willfully infringed on such parties’

patent rights.

In addition to any damages we might have to pay, a court could require us to stop the infringing

activity or obtain a license.

Any license required under any patent may not be made available on commercially acceptable terms,

In addition, such licenses are likely to be non-exclusive and, therefore, our competitors may have access to the same

If we fail to obtain a required license and are unable to design around a patent, we may be unable to effectively

market some of our technology and products, which could limit our ability to generate revenues or achieve profitability and possibly

prevent us from generating revenue sufficient to sustain operations.

to obtain additional regulatory approvals outside the United States will prevent or limit us from marketing our product candidates

In addition to any damages we might have to pay, a court could require us to stop the infringing activity or obtain a

Any license required under any patent may not be made available on commercially acceptable terms, if at all.

In addition, such

licenses are likely to be non-exclusive and, therefore, our competitors may have access to the same technology.

If we fail to obtain

a required license and are unable to design around a patent, we may be unable to effectively market some of our technology and products,

which could limit our ability to generate revenues or achieve profitability and possibly prevent us from generating revenue sufficient

to sustain operations.

to obtain additional regulatory approvals outside the United States will prevent or limit us from marketing our product candidates abroad.

intend to market our product candidates in non-U.S.

1 unchanged sentence

jurisdictions, we must obtain separate regulatory approvals.

In December 2012, we submitted our technical file to the Notified

Body in connection with our application to obtain CE Mark approval for the GlucoTrack®

model DF-F non-invasive glucose monitoring

On June 4, 2013, we received CE Mark approval for the GlucoTrack®

model DF-F non-invasive glucose monitoring device

In December 2012, we submitted our technical file to the Notified Body in

connection with our application to obtain CE Mark approval for GlucoTrack®

On June 4, 2013, we received CE Mark approval

for the GlucoTrack®

1.0 from the Notified Body.

Receipt of the CE Mark allows us to market and sell the GlucoTrack®

model DF-F glucose monitoring

device in EU member countries that have adopted the MDD without being subject to additional national regulations with regard to

demonstration of performance and safety.

The CE Mark also permits the sale in countries that have an MDD Mutual Recognition Agreement

However, member countries may apply and enforce the MDD’s terms differently, and certain EU member countries

may request or require that we provide performance and/or safety data additional to the MDD’s requirements from time to

time, on a case-by-case basis, in order to be cleared to market and sale the GlucoTrack®

model DF-F in such countries.

of FDA approval does not ensure approval by regulatory authorities in countries, and approval by one or more non-U.S.

authorities (including receipt of the CE Mark) does not ensure approval by regulatory authorities in other countries or by the

regulatory approval process may include all of the risks associated with obtaining FDA approval or clearance.

in EU member countries that have adopted the MDD without being subject to additional national regulations with regard to demonstration

of performance and safety.

The CE Mark also permits the sale in countries that have an MDD Mutual Recognition Agreement with the EU.

However, member countries may apply and enforce the MDD’s terms differently, and certain EU member countries may request or require

that we provide performance and/or safety data additional to the MDD’s requirements from time to time, on a case-by-case basis,

in order to be cleared to market and sale GlucoTrack®

in such countries.

Receipt of FDA approval does not ensure approval

by regulatory authorities in countries, and approval by one or more non-U.S.

regulatory authorities (including receipt of the CE Mark)

does not ensure approval by regulatory authorities in other countries or by the FDA.

regulatory approval process may include

all of the risks associated with obtaining FDA approval or clearance.

We may not obtain additional non-U.S.

regulatory approvals on a timely basis, if at all.

We may not be able to file for additional

regulatory approvals and may not receive necessary approvals to commercialize our product candidates in any market.

regulatory approvals on a

timely basis, if at all.

We may not be able to file for additional non-U.S.

regulatory approvals and may not receive necessary approvals

to commercialize our product candidates in any market.

governments often impose strict price controls, which may adversely affect our future profitability.

intend to seek approval to market GlucoTrack®

model DF-F and our future product candidates, if any, in both the U.S.

and our future product candidates, if any, in both the U.S.

and in non-U.S.

jurisdictions.

If we obtain approval in one or more non-U.S.

jurisdictions, we will be subject to rules and regulations

in those jurisdictions relating to our products.

In some countries, particularly countries of the EU, each of which has developed

its own rules and regulations, pricing may be subject to governmental control under certain circumstances.

In these countries,

pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a medical

device candidate.

Each of the EU member states has its own unique legal system and thus it is difficult to predict the particular

requirements to which we may be subject.

To obtain reimbursement or pricing approval in some countries, we may be required to

conduct a clinical trial that compares the cost-effectiveness of our product to other available products.

If reimbursement of

our product candidates is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, we may be

unable to achieve or sustain profitability.

business may become subject to economic, political, regulatory and other risks associated with international operations, which

could harm our business.

jurisdictions, we will be subject to rules and regulations in those jurisdictions

relating to our products.

In some countries, particularly countries of the EU, each of which has developed its own rules and regulations,

pricing may be subject to governmental control under certain circumstances.

In these countries, pricing negotiations with governmental

authorities can take considerable time after the receipt of marketing approval for a medical device candidate.

Each of the EU member

states has its own unique legal system and thus it is difficult to predict the particular requirements to which we may be subject.

obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness

of our product to other available products.

If reimbursement of our product candidates is unavailable or limited in scope or amount,

or if pricing is set at unsatisfactory levels, we may be unable to achieve or sustain profitability.

business may become subject to economic, political, regulatory and other risks associated with international operations, which could

harm our business.

business is subject to risks associated with conducting business internationally.

Accordingly, our future results could be harmed

by a variety of factors, including:

Accordingly, our future results could be harmed by

a variety of factors, including:

in compliance with non-U.S.

6 unchanged sentences

associated with staffing and managing foreign operations, including differing labor relations.

may not be able to enforce covenants not-to-compete under current Israeli law, which might result in added competition for our

may not be able to enforce covenants not-to-compete under current Israeli law, which might result in added competition for our products.

have non-competition agreements or provisions with all of our employees and executive officers, all of which are governed by Israeli

These agreements or provisions prohibit our employees from competing with us or working for our competitors, generally during,

and for up to nine months after termination of, their employment with us.

However, Israeli courts are reluctant to enforce non-compete

undertakings of former employees and tend, if at all, to enforce those provisions for only relatively brief periods of time or

in restricted geographical areas.

In addition, Israeli courts typically require the presence of additional circumstances, such

as a demonstration of an employer’s legitimate interest which was damaged;

breach of fiduciary duties, loyalty and acting

not in good faith;

a payment of a special consideration for employee’s non-compete obligation;

material concern for disclosing

employer’s trade secrets;

or a demonstration that an employee has unique value to the employer specific to that employer’s

business, before enforcing a non-competition undertaking against such employee.

funding that we received through the Office of the Chief Scientist (the “OCS”) for research and development activities

restricts our ability to manufacture products or to transfer technology outside of Israel.

March 4, 2004, the OCS agreed to provide us with a grant of 420,000 New Israeli Shekels (“NIS”), or approximately

$93,300 at an exchange rate of 4.502 NIS/dollar (the exchange rate in effect on such date), for our plan to develop a non-invasive

These agreements or provisions prohibit our employees from competing with us or working for our competitors, generally during, and

for up to nine months after termination of, their employment with us.

However, Israeli courts are reluctant to enforce non-compete undertakings

of former employees and tend, if at all, to enforce those provisions for only relatively brief periods of time or in restricted geographical

In addition, Israeli courts typically require the presence of additional circumstances, such as a demonstration of an employer’s

legitimate interest which was damaged;

breach of fiduciary duties, loyalty and acting not in good faith;

a payment of a special consideration

for employee’s non-compete obligation;

material concern for disclosing employer’s trade secrets;

or a demonstration that

an employee has unique value to the employer specific to that employer’s business, before enforcing a non-competition undertaking

against such employee.

funding that we received through the Office of the Chief Scientist (the “OCS”) for research and development activities restricts

our ability to manufacture products or to transfer technology outside of Israel.

March 4, 2004, the OCS agreed to provide us with a grant of 420 thousand New Israeli Shekels (“NIS”), or approximately

$93 thousand at an exchange rate of 4.502 NIS/dollar (the exchange rate in effect on such date), for our plan to develop a non-invasive

blood glucose monitor (the “development plan”).

This grant constituted 60% of our research and development budget

for the development plan at that time.

Due to our acceptance of this grant, we are subject to the provisions of the Israeli Law

for the Encouragement of Industrial Research and Development, 1984 (the “R&D Law”).

Among other things, the R&D

Law restricts our ability to sell or transfer rights in technology or know-how developed with OCS funding or transfer any Means

of Control (as defined in the R&D Law) of us to non-Israeli entities.

The Industrial Research and Development Committee at

the OCS (the “research committee”) may, under special circumstances, approve the transfer outside of Israel of rights

in technology or know-how developed with OCS funding subject to certain conditions, including the condition that certain payments

be made to the OCS.

Additionally, we may not manufacture products developed with OCS funding outside of Israel without the approval

of the research committee.

The restrictions regarding the sale or transfer of technology or manufacturing rights out of Israel

could have a material adverse effect on our ability to enter into strategic alliances or enter into merger or acquisition transactions

in the future that provide for the sale or transfer of our technology or manufacturing rights.

This grant constituted 60% of our research and development budget for the

development plan at that time.

Due to our acceptance of this grant, we are subject to the provisions of the Israeli Law for the Encouragement

of Industrial Research and Development, 1984 (the “R&D Law”).

Among other things, the R&D Law restricts our ability

to sell or transfer rights in technology or know-how developed with OCS funding or transfer any Means of Control (as defined in the R&D

Law) of us to non-Israeli entities.

The Industrial Research and Development Committee at the OCS (the “research committee”)

may, under special circumstances, approve the transfer outside of Israel of rights in technology or know-how developed with OCS funding

subject to certain conditions, including the condition that certain payments be made to the OCS.

Additionally, we may not manufacture

products developed with OCS funding outside of Israel without the approval of the research committee.

The restrictions regarding the

sale or transfer of technology or manufacturing rights out of Israel could have a material adverse effect on our ability to enter into

strategic alliances or enter into merger or acquisition transactions in the future that provide for the sale or transfer of our technology

or manufacturing rights.

are subject to certain employee severance obligations, which may result in an increase in our expenditures.

Israeli law, employers are required to make severance payments to dismissed employees and employees leaving employment in certain

other circumstances, on the basis of the latest monthly salary for each year of service.

This obligation results in an increase

in our expenses, including accrued expenses.

Integrity Israel currently makes monthly deposits to insurance policies and severance

pay funds in order to provide for this liability.

Company’s and its Israeli subsidiary’s agreements with all of their Israeli employees are in accordance with Section

14 of the Israeli Severance Pay Law -1963 (“Section 14”).

Payments in accordance with Section 14 release the Company

from any other future severance payments in respect of those employees.

Deposits under Section 14 are not recorded as an asset

in the Company’s balance sheet.

Israeli law, employers are required to make severance payments to dismissed employees and employees leaving employment in certain other

circumstances, on the basis of the latest monthly salary for each year of service.

This obligation results in an increase in our expenses,

including accrued expenses.

Integrity Israel currently makes monthly deposits to insurance policies and severance pay funds in order

to provide for this liability.

Company’s and its Israeli subsidiary’s agreements with all of their Israeli employees are in accordance with Section 14 of

the Israeli Severance Pay Law -1963 (“Section 14”).

Payments in accordance with Section 14 release the Company from any other

future severance payments in respect of those employees.

Deposits under Section 14 are not recorded as an asset in the Company’s

balance sheet.

may be at risk for delay in product development and other economic repercussions as a result of the COVID-19 pandemic.

may be at risk as a result of the current COVID-19 pandemic.

Risks that could affect our business include the duration and scope

of the COVID-19 pandemic and the impact on the demand for our products;

actions by governments, businesses and individuals taken

in response to the pandemic;

Risks that could affect our business include the duration and scope of the

COVID-19 pandemic and the impact on the demand for our products;

actions by governments, businesses and individuals taken in response

to the pandemic;

the length of time of the COVID-19 pandemic and the possibility of its reoccurrence;

the timing required

to develop effective treatments and a vaccine in the event of future outbreaks;

the eventual impact of the pandemic and actions

taken in response to the pandemic on global and regional economies;

the timing required to develop

effective treatments and a vaccine in the event of future outbreaks;

the eventual impact of the pandemic and actions taken in response

to the pandemic on global and regional economies;

and the pace of recovery when the COVID-19 pandemic subsides.

is a limited trading market for our common stock, which may make it difficult for our stockholders to sell their shares.

our stock is quoted on the OTCQB, few trades in our stock have taken place, to-date, and an active trading market in our securities

may not develop, or if developed, may not be sustained.

If no active market is ever developed for our Common Stock, it will be

difficult for you to sell any shares you purchase in our Company at the time you wish to sell them or at a price that you consider

reasonable or at all.

In such a case, you may find that you are unable to achieve any benefit from your investment or liquidate

your shares without considerable delay, if at all.

In the absence of an active public trading market, an investor may be unable

to liquidate an investment in our Common Stock.

our stock is quoted on the OTCQB, few trades in our stock have taken place, to-date, and an active trading market in our securities may

not develop, or if developed, may not be sustained.

If no active market is ever developed for our Common Stock, it will be difficult

for you to sell any shares you purchase in our Company at the time you wish to sell them or at a price that you consider reasonable or

In such a case, you may find that you are unable to achieve any benefit from your investment or liquidate your shares without

considerable delay, if at all.

In the absence of an active public trading market, an investor may be unable to liquidate an investment

in our Common Stock.

As a result, investors:

(i) may be precluded from transferring their shares of

Common Stock;

(ii) may have to hold their shares of Common Stock for an indefinite period of time;

and (iii) must be able to bear

the complete economic risk of losing their investment in us.

In the event a market should develop for the Common Stock, there

can be no assurance that the market price will equal or exceed the price paid for such share by any of our stockholders.

may be limitations on the effectiveness of our internal controls, and a failure of our control systems to prevent error or fraud

may materially harm our company.

(i) may be precluded from transferring their shares of Common Stock;

(ii) may have to hold

their shares of Common Stock for an indefinite period of time;

and (iii) must be able to bear the complete economic risk of losing their

investment in us.

In the event a market should develop for the Common Stock, there can be no assurance that the market price will equal

or exceed the price paid for such share by any of our stockholders.

may be limitations on the effectiveness of our internal controls, and a failure of our control systems to prevent error or fraud may

materially harm our company.

systems of internal controls over financial accounting and disclosure are critical to the operation of a public company.

are unable to effectively establish such systems, this would leave us without the ability to reliably assimilate and compile financial

information about our company and significantly impair our ability to prevent error and detect fraud, all of which would have

a negative impact on our company from many perspectives.

If we are unable

to effectively establish such systems, this would leave us without the ability to reliably assimilate and compile financial information

about our company and significantly impair our ability to prevent error and detect fraud, all of which would have a negative impact on

our company from many perspectives.

we do not expect that disclosure controls or internal control over financial reporting will prevent all error and all fraud.

control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control

system’s objectives will be met.

Further, the design of a control system must reflect the fact that there are resource constraints

and the benefits of controls must be considered relative to their costs.

Because of the inherent limitations in all control systems,

no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Failure of our control systems to prevent error or fraud could materially adversely impact us.

system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s

objectives will be met.

Further, the design of a control system must reflect the fact that there are resource constraints and the benefits

of controls must be considered relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of

controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Failure of our control

systems to prevent error or fraud could materially adversely impact us.

market price of our common stock may fluctuate significantly.

The market price of the common stock may fluctuate significantly

in response to numerous factors, some of which are beyond our control, such as:

market price of the common stock may fluctuate significantly in response to numerous factors, some of which are beyond our control, such

announcement of new products or product enhancements by us or our competitors;

10 unchanged sentences

market conditions and other factors, including factors unrelated to our operating performance.

in recent years, the stock market in general, and the market for medical device companies in particular, have experienced extreme

price and volume fluctuations.

Continued or renewed market fluctuations could result in extreme volatility in the price of our

common stock, which could cause a decline in the value of the common stock.

Price volatility of our common stock might be significant

if the trading volume of the common stock is low, which often occurs with respect to newly traded securities on the OTCQB.

in recent years, the stock market in general, and the market for medical device companies in particular, have experienced extreme price

and volume fluctuations.

Continued or renewed market fluctuations could result in extreme volatility in the price of our common stock,

which could cause a decline in the value of the common stock.

Price volatility of our common stock might be significant if the trading

volume of the common stock is low, which often occurs with respect to newly traded securities on the OTCQB.

our common stock is a “penny stock,”

it may be more difficult for investors to sell shares of the common stock, and

the market price of the common stock may be adversely affected.

common stock may be a penny stock if, among other things, the stock price is below $5.00 per share, it is not listed on a national

securities exchange or approved for quotation on the Nasdaq Stock Market or any other national securities exchange or it has not

met certain net tangible asset or average revenue requirements.

Broker-dealers who sell penny stocks must provide purchasers of

these stocks with a standardized risk- disclosure document prepared by the SEC.

This document provides information about penny

stocks and the nature and level of risks involved in investing in the penny-stock market.

A broker must also give a purchaser,

orally or in writing, bid and offer quotations and information regarding broker and salesperson compensation, make a written determination

that the penny stock is a suitable investment for the purchaser and obtain the purchaser’s written agreement to the purchase.

Broker-dealers must also provide customers that hold penny stock in their accounts with such broker-dealer a monthly statement

containing price and market information relating to the penny stock.

If a penny stock is sold to an investor in violation of the

penny stock rules, the investor may be able to cancel its purchase and get its money back.

it may be more difficult for investors to sell shares of the common stock, and the market

price of the common stock may be adversely affected.

common stock may be a penny stock if, among other things, the stock price is below $5.00 per share, it is not listed on a national securities

exchange or approved for quotation on the Nasdaq Stock Market or any other national securities exchange or it has not met certain net

tangible asset or average revenue requirements.

Broker-dealers who sell penny stocks must provide purchasers of these stocks with a standardized

risk- disclosure document prepared by the SEC.

This document provides information about penny stocks and the nature and level of risks

involved in investing in the penny-stock market.

A broker must also give a purchaser, orally or in writing, bid and offer quotations

and information regarding broker and salesperson compensation, make a written determination that the penny stock is a suitable investment

for the purchaser and obtain the purchaser’s written agreement to the purchase.

Broker-dealers must also provide customers that

hold penny stock in their accounts with such broker-dealer a monthly statement containing price and market information relating to the

If a penny stock is sold to an investor in violation of the penny stock rules, the investor may be able to cancel its purchase

and get its money back.

applicable, the penny stock rules may make it difficult for investors to sell their shares of common stock.

Because of the rules

and restrictions applicable to a penny stock, there is less trading in penny stocks and the market price of the common stock may

be adversely affected.

Because of the rules and

restrictions applicable to a penny stock, there is less trading in penny stocks and the market price of the common stock may be adversely

Also, many brokers choose not to participate in penny stock transactions.

Accordingly, investors may not

always be able to resell their shares of common stock publicly at times and prices that they feel are appropriate.

Accordingly, investors may not always be able to

resell their shares of common stock publicly at times and prices that they feel are appropriate.

with changing regulations concerning corporate governance and public disclosure may result in additional expenses.

2 unchanged sentences

These new or changed

laws, regulations and standards are subject to varying interpretations in many cases due to their lack of specificity, and, as

a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which

could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure

and governance practices.

As a result, our efforts to comply with evolving laws, regulations and standards are likely to continue

to result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating

activities to compliance activities.

Our directors, Chief Executive Officer and Chief Financial Officer could face an increased

risk of personal liability in connection with the performance of their duties.

As a result, we may have difficulty attracting

and retaining qualified directors and executive officers, which could harm our business.

If our efforts to comply with new or

changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies, we could be subject

to liability under applicable laws or our reputation may be harmed.

a certain portion of our expenses is incurred in currencies other than the NIS, our results of operations may be harmed by currency

fluctuations and inflation.

laws, regulations and standards are subject to varying interpretations in many cases due to their lack of specificity, and, as a result,

their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result

in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance

As a result, our efforts to comply with evolving laws, regulations and standards are likely to continue to result in increased

general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance

Our directors, Chief Executive Officer and Chief Financial Officer could face an increased risk of personal liability in

connection with the performance of their duties.

As a result, we may have difficulty attracting and retaining qualified directors and

executive officers, which could harm our business.

If our efforts to comply with new or changed laws, regulations and standards differ

from the activities intended by regulatory or governing bodies, we could be subject to liability under applicable laws or our reputation

may be harmed.

a certain portion of our expenses is incurred in currencies other than the NIS, our results of operations may be harmed by currency fluctuations

and inflation.

functional currency of Integrity Israel is the NIS, and we pay a substantial portion of our expenses in NIS.

However, we expect

a portion of our future revenues to be denominated in U.S.

However, we expect a portion

of our future revenues to be denominated in U.S.

dollars or in Euros.

As a result, we will be exposed to the currency

fluctuation risks relating to the recording of our revenues in NIS.

As a result, we will be exposed to the currency fluctuation risks

relating to the recording of our revenues in NIS.

For example, if the NIS strengthens against either the U.S.

dollar or the Euro, our reported expenses in NIS may be higher than anticipated.

The Israeli rate of inflation has not offset

or compounded the effects caused by fluctuations between the NIS and the U.S.

dollar or the Euro, our

reported expenses in NIS may be higher than anticipated.

The Israeli rate of inflation has not offset or compounded the effects caused

by fluctuations between the NIS and the U.S.

dollar or the Euro.

To date, we have not engaged

in hedging transactions.

Although the Israeli rate of inflation has not had a material adverse effect on our financial condition

to date, we may, in the future, decide to enter into currency hedging transactions to decrease the risk of financial exposure

from fluctuations in the exchange rates of the currencies mentioned above in relation to the NIS.

These measures, however, may

not adequately protect us from material adverse effects.

To date, we have not engaged in hedging transactions.

Although the Israeli

rate of inflation has not had a material adverse effect on our financial condition to date, we may, in the future, decide to enter into

currency hedging transactions to decrease the risk of financial exposure from fluctuations in the exchange rates of the currencies mentioned

above in relation to the NIS.

These measures, however, may not adequately protect us from material adverse effects.

adoption of the “Conflict Minerals”

regulations may adversely affect the manufacturing of our current and future products.

regulatory requirements regarding the use of “conflict minerals”

could affect the sourcing and availability of the

raw materials used by our third-party manufacturers.

We may be subject to costs associated with the new regulations, including

for the diligence pertaining to the presence of any conflict minerals used in our products and the cost of remediation and other

changes to products, processes, or sources of supply as a consequence of such verification activities.

The impact of the regulations

may result in a limited pool of suppliers who provide conflict free minerals, and we cannot assure that we will be able to obtain

products in sufficient quantities or at competitive prices.

We may face reputational challenges with our customers and other stakeholders

if we are unable to sufficiently verify the origins for the metals used in the products we sell.

As a result, we may not be able

to obtain the materials necessary to manufacture our products, which could force us to cease production or search for alternative

supply sources, possibly at a higher cost.

Such disruptions may have a material adverse effect on our business, financial condition,

results of operations and cash flows.

Regulatory requirements

regarding the use of “conflict minerals”

could affect the sourcing and availability of the raw materials used by our third-party

manufacturers.

We may be subject to costs associated with the new regulations, including for the diligence pertaining to the presence

of any conflict minerals used in our products and the cost of remediation and other changes to products, processes, or sources of supply

as a consequence of such verification activities.

The impact of the regulations may result in a limited pool of suppliers who provide

conflict free minerals, and we cannot assure that we will be able to obtain products in sufficient quantities or at competitive prices.

We may face reputational challenges with our customers and other stakeholders if we are unable to sufficiently verify the origins for

the metals used in the products we sell.

As a result, we may not be able to obtain the materials necessary to manufacture our products,

which could force us to cease production or search for alternative supply sources, possibly at a higher cost.

Such disruptions may have

a material adverse effect on our business, financial condition, results of operations and cash flows.

Unresolved Staff Comments.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors