What changed in this filing

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Item 1. Financial Statements

2022-05-16 compared with 2021-11-15 · 132 added, 162 removed, 86 unchanged (77% of the section changed)

Financial Statements

APPLICATIONS, INC.

INTEGRITY APPLICATIONS, INC.)

CONSOLIDATED BALANCE SHEETS

1 unchanged sentence

(except share data)

September 30,

Current Assets

Cash and cash equivalents

Accounts receivable, net

Other current assets

2 unchanged sentences

Property and equipment, net

Non-current Restricted Cash

Restricted Cash

LIABILITIES AND STOCKHOLDERS’ EQUITY

5 unchanged sentences

Non-current Liabilities

Long-Term Loans from Stockholders

Loans from stockholders

Operating lease liabilities, non-current

4 unchanged sentences

500,000,000 shares authorized;

15,444,697 shares issued and outstanding as of September 30, 2021 and December 31, 2020

15,452,285 shares issued and outstanding as of March 31, 2022 and December 31, 2021

Common Stock Value

Additional paid-in capital

Accumulated other comprehensive income

Accumulated other comprehensive income (loss)

Receipts on account of shares

3 unchanged sentences

accompanying notes are an integral part of these condensed consolidated financial statements.

APPLICATIONS, INC.

INTEGRITY APPLICATIONS, INC.)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

US dollars (except share data)

ended September 30,

period ended September 30,

Research and development

Selling and marketing expenses

General and administrative

In thousands of US dollars

(except share data)

Three-month period ended March 31,

Research and development expenses

Marketing expenses

General and administrative expenses

Total operating expenses

Operating loss

Other Income (expenses)

Finance Income, net

Other comprehensive expenses:

Foreign currency translation adjustment

Financing expense, net

Loss for the period

Other comprehensive income:

Foreign currency translation income

Comprehensive loss for the period

Net Loss per Common Share

Average number of common shares used in computing basic and diluted loss per share

Loss per share (Basic and Diluted)

Weighted average number of common stock outstanding used in computing basic and diluted net loss per share

accompanying notes are an integral part of these condensed consolidated financial statements.

APPLICATIONS, INC.

INTEGRITY APPLICATIONS, INC.)

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

US Dollars (except share data)

thousands of US dollars (except share data)

comprehensive

Stockholders’

as of January 1, 2021

for the period of three months

comprehensive income

as of March 31, 2021

thousands of US dollars (except share

Comprehensive

Balance at January 1, 2020

Loss for the period

Other comprehensive loss

Amounts allocated to issuance of Common Stock

Issuance of shares as settlement of financial liabilities

Warrants issued as consideration for placement agent services

Stock-based compensation

Balance at September 30, 2020

Balance at July 1, 2020

Loss for the period of three months

Other comprehensive loss

Issuance of shares as settlement of financial liabilities

Stock-based compensation

Balance at September 30, 2020

Balance at January 1, 2021

Loss for the period

Other comprehensive loss

Issuance of shares as settlement of financial liabilities

Stock-based compensation

Balance at September 30, 2021

Balance at July 1, 2021

Loss for the period

Other comprehensive loss

Issuance of shares as settlement of financial liabilities

Stock-based compensation

Balance at September 30, 2021

income (loss)

Stockholders’

at January 1, 2022

for the period of three months

comprehensive income

of restricted

as compensation towards directors (*)

as of March 31, 2022

(*) Actual issuance occurred subsequent to the balance sheet date.

accompanying notes are an integral part of these condensed consolidated financial statements.

APPLICATIONS, INC.

INTEGRITY APPLICATIONS, INC.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine-month period ended

September 30.

In Thousands of US dollars

Three-month period ended March 31,

Cash flows from operating activities:

Loss for the period

Adjustments to reconcile net loss to net cash used in operating activities:

Capital loss on sale of property and equipment

Adjustments to reconcile loss for the period to net cash used in operating activities:

Stock-based compensation

Issuance of restricted shares as compensation towards directors (*) (*)

Linkage difference on principal of loans from stockholders

Gain from settlement of liability to service provider

Changes in assets and liabilities:

Increase in accounts receivable

Increase in inventory

Increase in other current assets

Increase (Decrease) in other current assets

Decrease in accounts payable

Decrease in other current liabilities

Increase in other current liabilities

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale of property and equipment

Purchase of property and equipment

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of common stock, net of cash issuance expenses

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents, and restricted cash

Increase (decrease) in cash, cash equivalents, and restricted cash

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Change in cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash at beginning of the period

Cash, cash equivalents, and restricted cash, end of period

Supplementary

information on financing activities not involving cash flows (unaudited):

the Nine months ending September 30, 2021 and 2020, the Company settled independent board members’ fees for the first nine month

of 2020 and 2021 in the amount of approximately $ 168 and $ 25 thousand through the issuance of shares of common stock.

the Nine months ending September 30, 2020, an amount of $ 756 thousand representing the fair value of warrants issued as consideration

for placement agent services.

This amount was accounted for as Warrants with down-round protection.

Upon issuance, the fair value was

recognized as an increase in additional paid in capital.

Cash, cash equivalents, and restricted cash at end of the period

(*) Actual issuance occurred subsequent to the balance sheet date.

accompanying notes are an integral part of these condensed consolidated financial statements.

APPLICATIONS, INC.

INTEGRITY APPLICATIONS, INC.)

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Applications, Inc.

(the “Company”) was incorporated on May 18, 2010 under the laws of the State of Delaware.

15, 2010, Integrity Acquisition Corp.

Inc (Formerly:

Integrity Applications, Inc.) (the “Company”) was incorporated

on May 18, 2010 under the laws of the State of Delaware.

On July 15, 2010, GlucoTrack Acquisition

(hereinafter:

1 unchanged sentence

of the Company, which was established on May 23, 2010, completed a merger with A.D.

Integrity Applications Ltd.

Applications Ltd.

(hereinafter:

Israel”), an Israeli corporation that was previously held by the stockholders of the Company.

“Integrity Israel”), an Israeli corporation that

was previously held by the stockholders of the Company.

Pursuant to the merger, all equity

holders of Integrity Israel received the same proportional ownership in the Company as they had in Integrity Israel prior to the

Following the merger, Integrity Israel became a wholly-owned subsidiary of the Company.

As the merger transaction constituted

a structural reorganization, the merger has been accounted for at historical cost in a manner similar to a pooling of interests.

Integrity Israel was incorporated in 2001 and commenced its operations in 2002.

Integrity Israel, a medical device company, focuses

on the design, development and commercialization of non-invasive glucose monitoring devices for use by people with diabetes and prediabetes.

its incorporation, the Company’s material operations have all been carried out by Integrity Israel.

The development and commercialization

of Integrity Israel’s product is expected to require substantial expenditures.

The Group has not yet generated significant

revenues from operations, and therefore they are dependent upon external sources for financing their operations.

As of September

30, 2021, the Company has an accumulated deficit of $ 95,960 thousand.

In addition, in each year since its inception, the Company

reported losses from operations and negative cash flows from operating activities

February 14, 2020, the Company closed on a $ 15 million private placement of its common stock, for which it received net cash in excess

of $ 13,009 thousand.

As of September 30,2021, the company had cash and cash equivalents in the amount of approximately $ 7,000 thousand,

which is expected to be sufficient to meet its capital needs for at least 12 months from the date of issuance of these interim financial

statements, thus the Company is expected to be able to operate as a going concern for at least 12 months from the date hereof.

connection with its application to list its shares on NASDAQ, on August 13, 2021, the Company effected a reverse split of its Ordinary

Shares in a ratio of 1 for 13 (the “Reverse Share Split”).

For accounting purposes, all Shares, options and warrants

to purchase Ordinary Shares and loss per share amounts have been adjusted to give retroactive effect to this Reverse Share Split

for all periods presented in these consolidated interim financial statements.

Any fractional shares resulting from the Reverse Share

Split were rounded up to the nearest whole share.

September 27, 2021, the Company’s shelf registration statement on Form S-3 (file no.

333-259664) was declared effective by the SEC.

The shelf registration statement permits the

Company to register upto $ 100,000,000

certain equity and debt securities of the Company via prospectus supplement.

APPLICATIONS, INC.

holders of Integrity Israel received the same proportional ownership in the Company as they

had in Integrity Israel prior to the merger.

Following the merger, Integrity Israel remained

a wholly-owned subsidiary of the Company.

As the merger transaction constituted a structural

reorganization, the merger has been accounted for at historical cost in a manner similar

to a pooling of interests.

Integrity Israel was incorporated in 2001 and commenced its

operations in 2002 .

The Company and Integrity Israel are referred as the “Group”.

December 8, 2021, the Company announced that its shares of common stock were approved for listing on the Nasdaq Capital Market (“NASDAQ”).

Trading on NASDAQ commenced on December 10, 2021 under its existing trading symbol, IGAP.

March 14, 2022, the Company announced that it has completed its corporate name and ticker symbol change on the Nasdaq Capital

Market (from IGAP to GCTK), to be effective at the commencement of trading on March 14, 2022.

connection with its application to list its shares on Nasdaq Capital Market (“NASDAQ”), as detailed above, on August

13, 2021, the Company effected a reverse split of its Common Stock in a ratio of 1

for 13 (the “Reverse Share Split”).

For accounting purposes, all Shares, options and warrants to purchase Common Stock and loss per share amounts have been adjusted

to give retroactive effect to this Reverse Share Split for all periods presented in these consolidated financial statements.

fractional shares resulting from the Reverse Share Split were rounded up to the nearest whole share.

Going concern uncertainty

its incorporation, the Company did not conduct any material operations other than

those carried out by Integrity Israel a medical device company, which focuses on the design,

development and commercialization of non-invasive glucose monitoring devices for use by people

with diabetes.

The development and commercialization of Integrity Israel’s product

is expected to require substantial expenditures.

The Company and Integrity Israel

have not yet generated significant revenues from operations, and therefore they are dependent

upon external sources for financing their operations.

As of March 31, 2022, the Group

has accumulated deficit of $ 98,559 thousand, and incurred losses and generated negative cash

flow from operating activity for the three-months period.

As of March 31, 2022, the Company

had $ 4,789 thousand in cash.

Management has considered the significance of such condition

in relation to the Company’s ability to meet its current obligations and to achieve its business

targets and determined that these conditions raise substantial doubt about the Company’s

ability to continue as a going concern.

Company plans to finance its operations through the sale of equity and/or debt securities (including shelf registration statement

on Form S-3 that was declared effective on September 27, 2021 by the Securities and Exchange Commission (SEC) and which allows the

Company to register up to $ 100,000 thousand of certain equity and/or debt securities of the Company through prospectus supplement).

There can be no assurance that the Company will succeed in obtaining the necessary financing or generating sufficient revenues from

product sales to continue its operations as a going concern.

The consolidated financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

INTEGRITY APPLICATIONS, INC.)

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (cont.)

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

of presentation

accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with our consolidated

financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed

with the Securities and Exchange Commission (“SEC”) on April 13, 2021.

with the Securities and Exchange Commission (“SEC”) on March 31, 2022.

The unaudited condensed consolidated financial

8 unchanged sentences

All such adjustments are of a normal recurring nature

results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the

year ending December 31, 2021 or for any other interim period or for any future period.

results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending

December 31, 2022 or for any other interim period or for any future period.

of Consolidation

3 unchanged sentences

Loss Per Share

Company computes net loss per share in accordance with ASC 260, “Earnings per share”.

Basic loss per share is computed

by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during

the period, net of the weighted average number of treasury shares (if any).

loss per common share is computed similar to basic loss per share, except that the denominator is increased to include the number

of additional potential shares of common stock that would have been outstanding if the potential shares of common stock had been

issued and if the additional shares of common stock were dilutive.

Potential shares of common stock are excluded from the computation

for a period in which a net loss is reported or if their effect is anti-dilutive.

amount of 6,356,344 and 6,257,459 outstanding stock options and stock warrants have been excluded from the calculation of the diluted

net loss per share for the periods of nine months ended September 30, 2021 and 2020, respectively, because the effect of the common

shares issuable as a result of the exercise of such instruments was determined to be anti-dilutive.

APPLICATIONS, INC.

loss per share is computed by dividing the loss for the period applicable for holders of our Common Stock by the weighted average

number of shares of Common Stock outstanding during the period.

computing, diluted loss per share, basic earnings per share are adjusted to reflect the potential dilution that could occur upon

the exercise of options or warrants issued or granted using the “treasury stock method”, if the effect of each of such

financial instruments is dilutive.

computing diluted loss per share, the average stock price for the period is used in determining the number of common stock assumed

to be purchased from the exercise of stock options or stock warrants.

that will be issued upon exercise of all stock options and stock warrants, have been excluded from the calculation of the diluted

net loss per share for all the reported periods for which net loss was reported because the effect of the common shares issuable

as a result of the exercise or conversion of these instruments was anti-dilutive.

weighted average number of 6,452,510

and 6,481,598

outstanding stock options and stock warrants

have been excluded from the calculation of the diluted net loss per share for the period of three months ended March 31, 2022 and

2021, respectively, because the effect of the common shares issuable as a result of the exercise or conversion of these instruments

was determined to be anti-dilutive.

INTEGRITY APPLICATIONS, INC.)

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont.)

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Use of estimates in the preparation of financial statements

of estimates in the preparation of financial statements

preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States

4 unchanged sentences

As applicable to these consolidated

interim financial statements, the most significant estimates and assumptions relate to the determination of net realizable value

of inventory.

Reclassified Amounts

interim condensed financial statements, the most significant estimates and assumptions relate to the going concern assumptions.

prior year amounts have been reclassified for consistency with the current year presentation.

1 unchanged sentence

material effect on the reported results of operations, shareholder’s equity or cash flows .

company has entered into several non-cancelable operating lease agreements for the company’s offices and few vehicles.

The company’s

leases have original lease periods expiring between 2021 and 2023.

Payments due under such lease contracts include primarily fix payments.

The company does not assume renewals in the determination of the lease term unless the renewals are deemed to be reasonably assured at

lease commencement.

The company’s lease agreements do not contain any material residual value guarantees or material restrictive

components of lease costs, lease term and discount rate are as follows:

OF LEASE COSTS, LEASE TERM AND DISCOUNT

Nine Months Ended

September 30, 2021

Operating lease cost:

Remaining Lease Term

Weighted Average Discount Rate

APPLICATIONS, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont.)

3 – LEASES (cont.)

following is a schedule, by years, of maturities of operating lease liabilities as of September 30, 2021:

OF OPERATING LEASE MATURITY PAYMENTS

September 30, 2021

The remainder of 2021

Total operating lease payments

imputed interest

Present value of lease liabilities

INTEGRITY APPLICATIONS, INC.)

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (cont.)

3 – Cash and cash equivalents

OF CASH AND CASH EQUIVALENTS

4 – SUBSEQUENT EVENTS

[to be updated if any before filing].

Company has evaluated all subsequent events through the date when these financial statements were issued to determine if these must be

The Company determined that there were no reportable subsequent events to disclose in these financial statements.

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-Q

Item 1. Financial Statements