Glucotrack, Inc. 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission File Number: 001-41141 GLUCOTRACK, INC. (Exact name of registrant as specified in its charter) Delaware 98-0668934 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 8 Ariel Sharon Street P.O. Box 6037607 Or Yehuda , Israel L3 7760049 (Address of principal executive offices) (Zip Code) 972 (8) 675-7878 (Registrant’s telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock GCTK NASDAQ Capital Market Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of November 14, 2022, 15,476,665 shares of the Company’s common stock, par value $0.001 per share, were outstanding. GLUCOTRACK INC. TABLE OF CONTENTS Page PART I - FINANCIAL INFORMATION 3 Item 1. Financial Statements. 3 Condensed Consolidated Balance Sheets 3 Condensed Consolidated Statements of Operations and Comprehensive Loss 4 Condensed Consolidated Statement of Changes in Stockholders’ Equity 5 Condensed Consolidated Statements of Cash Flows 6 Notes to Condensed Consolidated Financial Statements 7 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 10 Item 3. Quantitative and Qualitative Disclosures About Market Risk. 15 Item 4. Controls and Procedures. 15 PART II - OTHER INFORMATION 16 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 16 Item 6. Exhibits. 16 EXHIBIT INDEX 16 SIGNATURES 17 2 GLUCOTRACK INC. PART I - FINANCIAL INFORMATION Item 1. Financial Statements GLUCOTRACK INC. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2022 December 31, 2021 In thousands of US dollars (except share data) September 30, 2022 December 31, 2021 (Unaudited) Current Assets Cash and cash equivalents 3,241 6,062 Other current assets 187 43 Total current assets 3,428 6,105 Operating lease right-of-use assets, net - 40 Property and equipment, net 44 69 Restricted Cash 39 51 TOTAL ASSETS 3,511 6,265 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Accounts payable 713 631 Operating lease liabilities, current - 23 Other current liabilities 252 229 Total Current Liabilities 965 883 Non-current Liabilities Loans from Stockholders 191 210 Operating lease liabilities, non-current - 17 Total Non-current liabilities 191 227 Total Liabilities 1,156 1,110 Stockholders’ Equity Common Stock of $ 0.001 par value (“Common Stock”): 500,000,000 shares authorized; 15,476,665 and 15,452,285 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively 15 15 Additional paid-in capital 102,906 102,612 Accumulated other comprehensive income (loss) 30 ( 6 ) Receipts on account of shares 18 - Accumulated deficit ( 100,614 ) ( 97,466 ) Total Stockholders’ equity 2,355 5,155 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 3,511 6,265 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 GLUCOTRACK INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS 2022 2021 2022 2021 In thousands of US dollars (except share data) Nine-month period ended September 30, Three-month period ended September 30, (Unaudited) (Unaudited) 2022 2021 2022 2021 Research and development 1,363 1,077 434 447 Marketing expenses - 136 - 113 General and administrative 1,782 1,323 495 207 Total operating expenses 3,145 2,536 929 767 Operating Loss ( 3,145 ) ( 2,536 ) ( 929 ) ( 767 ) Other expenses ( 1 ) ( 46 ) ( 1 ) ( 46 ) Finance Income (Expenses), net ( 2 ) 21 2 9 Net Loss ( 3,148 ) ( 2,561 ) ( 928 ) ( 804 ) Other comprehensive income (expenses): Foreign currency translation adjustment 36 ( 11 ) ( 1 ) ( 4 ) Comprehensive loss for the period ( 3,112 ) ( 2,572 ) ( 929 ) ( 808 ) Net Loss per Common Stock Basic ( 0.20 ) ( 0.17 ) ( 0.06 ) ( 0.05 ) Diluted ( 0.20 ) ( 0.17 ) ( 0.06 ) ( 0.05 ) Average number of Common Stock used in computing basic and diluted loss per share 15,468,279 15,448,923 15,473,521 15,451,726 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 GLUCOTRACK INC. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY Numbers of Shares Amount Paid-in Capital account of shares Comprehensive Loss Accumulated Deficit Stockholders’ Equity In thousands of US Dollars (except share data) (Unaudited) Common Stock Additional Receipts on Accumulated Other Total Numbers of Shares Amount Paid-in Capital account of shares Comprehensive Loss Accumulated Deficit Stockholders’ Equity Balance at January 1, 2021 15,444,697 15 102,351 - 15 ( 93,399 ) 8,982 Loss for the period - - - - - ( 2,561 ) ( 2,561 ) Other comprehensive loss - - - - ( 11 ) - ( 11 ) Issuance of restricted shares as compensation towards directors ( * ) - - - 25 - - 25 Stock-based compensation - - 66 - - - 66 Balance at September 30, 2021 15,444,697 15 102,417 25 4 ( 95,960 ) 6,501 Balance at July 1, 2021 15,444,697 15 102,409 10 8 ( 95,156 ) 7,286 Loss for the period - - - - - ( 804 ) ( 804 ) Other comprehensive loss - - - - ( 4 ) - ( 4 ) Stock-based compensation - - 8 - - - 8 Issuance of restricted shares as compensation towards directors ( * ) - - - 15 - - 15 Balance at September 30, 2021 15,444,697 15 102,417 25 4 ( 95,960 ) 6,501 Balance at January 1, 2022 15,452,285 15 102,612 - ( 6 ) ( 97,466 ) 5,155 Loss for the period ( 3,148 ) ( 3,148 ) Other comprehensive income - - - - 36 - 36 Issuance of restricted shares as compensation towards directors 11,275 - 20 - - - 20 Restricted shares to be issued as compensation towards directors ( * ) - - - 18 - - 18 Stock-based compensation 13,105 - 274 - - - 274 Balance at September 30, 2022 15,476,665 15 102,906 18 30 ( 100,614 ) 2,355 Balance at July 1, 2022 15,473,262 15 102,821 9 31 ( 99,686 ) 3,190 Beginning balance, value 15,473,262 15 102,821 9 31 ( 99,686 ) 3,190 Loss for the period - - - - - ( 928 ) ( 928 ) Other comprehensive income (expenses) - - - - ( 1 ) - ( 1 ) Issuance of restricted shares as compensation towards directors ( * ) 3,403 - 9 ( 9 ) - - - Issuance of restricted shares as compensation towards directors 3,403 - 9 ( 9 ) - - - Restricted shares to be issued as compensation towards directors ( * ) - - - 18 - - 18 Restricted shares to be issued as compensation towards directors - - - 18 - - 18 Stock-based compensation - 76 - - - 76 Balance at September 30, 2022 15,476,665 15 102,906 18 30 ( 100,614 ) 2,355 Ending balance, value 15,476,665 15 102,906 18 30 ( 100,614 ) 2,355 (*) Actual issuance occurred subsequent to the balance sheet date. The accompanying notes are an integral part of these condensed consolidated financial statements. 5 GLUCOTRACK INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 2022 2021 In thousands of US Dollars Nine-month period ended September 30. 2022 2021 (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Loss for the period $ ( 3,148 ) $ ( 2,561 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 19 33 Capital loss on sale of property and equipment - 41 Stock-based compensation 274 66 Issuance of restricted shares as compensation towards directors ( * ) 38 - Issuance of restricted shares as compensation towards directors 38 - Linkage difference on principal of loans from stockholders 8 5 Changes in assets and liabilities: Increase in inventory - ( 6 ) Increase in other current assets ( 148 ) ( 9 ) Increase (Decrease) in accounts payable 117 ( 223 ) Increase (Decrease) in other current liabilities 51 ( 142 ) Net cash used in operating activities ( 2,789 ) ( 2,796 ) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of property and equipment - 4 Purchase of property and equipment ( 4 ) ( 1 ) Net cash provided by (used in) investing activities ( 4 ) 3 Effect of exchange rate changes on cash and cash equivalents, and restricted cash ( 40 ) ( 14 ) Decrease in cash, cash equivalents, and restricted cash ( 2,833 ) ( 2,807 ) Cash, cash equivalents, and restricted cash at beginning of the period 6,113 9,885 Cash, cash equivalents, and restricted cash, end of period $ 3,280 $ 7,078 (*) Actual issuance occurred subsequent to the balance sheet date. The accompanying notes are an integral part of these condensed consolidated financial statements. 6 GLUCOTRACK INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) NOTE 1 – GENERAL A. GlucoTrack Inc (the “Company”) was incorporated on May 18, 2010 under the laws of the State of Delaware. On July 15, 2010, GlucoTrack Acquisition Corp. Ltd. (hereinafter: “Integrity Acquisition”), a wholly owned Israeli subsidiary of the Company, which was established on May 23, 2010, completed a merger with A.D. Integrity Applications Ltd. (hereinafter: “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 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”. On 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. On 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. In 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 interim consolidated financial statements. Any fractional shares resulting from the Reverse Share Split were rounded up to the nearest whole share. B. Going concern uncertainty Since its incorporation, the Company did not conduct any material operations other than the design, development and commercialization of the first generation of non-invasive glucose monitoring devices for use by people with diabetes. The development and commercialization of the second generation of the 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 September 30, 2022, the Group has accumulated deficit of $ 100,614 thousand, and incurred losses and generated negative cash flow from operating activity for the nine-months period. As of September 30, 2022, the Company had $ 3,241 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. The 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. 7 GLUCOTRACK INC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (cont.) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basis of presentation Accounting Principles The accompanying unaudited condensed consolidated interim 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 March 31, 2022. The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC related to interim financial statements. As permitted under those rules, certain information and footnote disclosures normally required or included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are considered necessary to present fairly the results of the Company’s financial position and operating results for the interim periods. All such adjustments are of a normal recurring nature The results for the nine months ended September 30, 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. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiary. Significant intercompany balances and transactions have been eliminated in consolidation Net Loss Per Share Basic 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. In 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. In 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. Shares 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 Stock issuable as a result of the exercise or conversion of these instruments was anti-dilutive. Total weighted average number of 6,562,279 and 6,356,344 outstanding stock options and stock warrants have been excluded from the calculation of the diluted net loss per share for the period of nine months ended September 30, 2022 and 2021, respectively, because the effect of the Common stock issuable as a result of the exercise or conversion of these instruments was determined to be anti-dilutive. 8 GLUCOTRACK INC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B. Use of estimates in the preparation of financial statements The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. As applicable to these consolidated interim condensed financial statements, the most significant estimates and assumptions relate to the going concern assumptions. NOTE 3 – CASH AND CASH EQUIVALENTS SCHEDULE OF CASH AND CASH EQUIVALENTS US dollars September 30, December 31, 2022 2021 US Dollar 3,226 6,028 Other 15 34 3,241 6,062 NOTE 4 – SUBSEQUENT EVENTS The Company has evaluated all subsequent events through the date when these financial statements were issued to determine if these must be reported. The Company determined that there were no reportable subsequent events to disclose in these financial statements. 9 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Cautionary Note Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking statements include statements about our expectations, beliefs or intentions regarding our product development efforts, business, financial condition, results of operations, strategies and prospects. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q, including statements regarding our future activities, events or developments, including such things as future revenues, capital raising and financing, product development, clinical trials, regulatory approval, market acceptance, responses from competitors, capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, competitive strengths, goals, expansion and growth of our business and operations, plans, references to future success, projected performance and trends, and other such matters, are forward-looking statements. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “plan,” “may,” “will,” “could,” “would,” “should” and other similar words and phrases, are intended to identify forward-looking statements. The forward-looking statements made in this Quarterly Report on Form 10-Q are based on certain historical trends, current conditions and expected future developments as well as other factors we believe are appropriate in the circumstances. These statements relate only to events as of the date on which the statements are made and we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. All of the forward-looking statements made in this Quarterly Report on Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on us or our business or operations. Whether actual results will conform to our expectations and predictions is subject to a number of risks and uncertainties that may cause actual results to differ materially. Risks and uncertainties, the occurrence of which could adversely affect our business, include the risks identified under the caption “Risk Factors” included in our annual report on Form 10-K for the year ended December 31, 2021. The following discussion should be read in conjunction with the condensed consolidated financial statements and the notes thereto included in Item 1 of this Quarterly Report on Form 10-Q. Overview We were incorporated in Delaware in May 2010. On July 15, 2010, we completed a reverse triangular merger with Integrity Israel and Integrity Acquisition Corp. Ltd., an Israeli corporation and a wholly owned subsidiary of ours, pursuant to which Integrity Acquisition Corp. Ltd. merged with and into Integrity Israel and all of the stockholders and option holders of Integrity Israel became entitled to receive shares and options in us in exchange for their shares and options in Integrity Israel (the “Reorganization”). Following the Reorganization, the former equity holders of Integrity Israel were entitled to the same proportional ownership in us as they had in Integrity Israel prior to the Reorganization. As a result of the Reorganization, Integrity Israel became a wholly owned subsidiary of ours. We operate primarily through Integrity Israel. 10 We are a medical device company focused on the design, development and commercialization of innovative technologies for use by people with diabetes and prediabetes. Our first product focus is GlucoTrack®, a non-invasive blood glucose monitor designed to help people with diabetes obtain spot blood glucose level readings without the pain, inconvenience, cost and difficulty of conventional (invasive) spot finger stick devices. Our first-generation device, GlucoTrack® 1.0 utilized a patented combination of ultrasound, electromagnetic and thermal technologies to obtain blood glucose measurements in approximately one minute via a small sensor that is clipped onto one’s earlobe and connected to a small, handheld control and display unit, all without drawing blood. GlucoTrack® 1.0, which received CE Mark approval, underwent a limited release beta test in Europe and the Middle East. The Company is now focused on the development of its next generation non-invasive glucose monitor, GlucoTrack® 2.0. In addition, following the recent acquisition of certain related IP, the Company has commenced an R&D program to develop a long-term implantable glucose management technology to address the growing Type 1 and insulin dependent Type 2 diabetes market. GlucoTrack® 2.0 utilizes a different and significantly simplified and less costly sensor technology than our 1.0 technology. We are designing a form factor that will shed the wired handheld unit from the GlucoTrack 1.0 design to be a completely wireless clip with Bluetooth connectivity for pairing directly with the user’s own mobile device (smartphone and/or tablet). The device will be pocket-sized and rechargeable, facilitating easy and convenient portability. Eliminating the cabled main unit hardware is also expected to significantly lower our manufacturing costs. This will enable an attractive end-user price point while maintaining healthy margins for the company. In addition, we believe that the new sensor technology will lead to a substantially faster measurement than our 1.0 version. In Q2 of this year, the Company completed lab testing of its 2.0 clinical prototype system. This process included testing of multiple iterations of electronics, ear clip, and mobile app with cloud-based software. In addition, human factors testing of the mobile app has been completed through simulated use in focus groups and by conducting a rigorous external design review for system architecture, stability, and cybersecurity. The completion of bench testing and analyses of the clinical prototype system was followed by simulated use testing. During this in-house testing of multiple iterations, the Company achieved better than expected accuracy and performance. Initial data collected indicates that the Gen 2 system may achieve an accuracy comparable to invasive Continuous Glucose Monitors (CGM’s) currently available in the market when conducting the upcoming first in-human clinical study. Further to that, the testing validated a dramatically faster speed of measurement is possible, which will significantly improve the patient use experience. The in-house testing also exposed some clip-based human factors considerations that appear to impact consistent device performance. Further improvements are being investigated to improve device performance consistency prior to launching the first-in-human clinical study, which is expected to be conducted at the Rabin Medical Center in Israel. The initial results from this study will drive a follow-up multi-center study in the United States, led by Dr. Klonoff, Chair of the Company’s Scientific Advisory Board and Medical Director of the Diabetes Research Institute of Mills-Peninsula Medical Center. The U.S. study is intended to be a precursor to the eventual pivotal trial for FDA clearance. We are also developing a wireless mobile platform that will support capturing anonymized data that can leverage novel machine learning (AI) and data analytic techniques to facilitate device iterations and glucose sensing accuracy improvements. In addition, mobile device pairing to this platform will facilitate data transfer to electronic medical records (EMRs) used by managing physicians to effectively treat their patients. Moreover, this data can provide a potential revenue stream for valuable T2DM and pre-T2DM de-identified patient data that can be used by third-party organizations such as pharma, insurance, and others. While historically the Company has operated out of its Israel location, the Company has transitioned all operations and development to the United States as of the end of Q3. Remaining activities in Israel include accounting and as-needed contract resources to support the first-in-human clinical trial. A number of high-quality individuals have joined the Company, each of whom bring extensive experience in their respective fields. Paul, V. Goode PhD, who has a decorated career developing innovative medical technologies, including at DexCom and MiniMed and was a member of the Board of Directors of the Company, has been appointed as President and Chief Executive Officer. In addition, James P. Thrower PhD, a seasoned executive formerly of Sterling Medical Devices, Mindray DS USA and DexCom, Inc. joined as Vice President of Engineering. Mark Tapsak PhD, a medical research scientist, joined as Vice President of Sensor Technology, bringing over 25 years of experience in the diabetes industry, including previous senior roles at DexCom and Medtronic, Inc. Luis J. Malavé, formerly of Insulet Corp, Medtronic and MiniMed has joined as an independent board member. Several highly talented and accomplished executives joined the Company as senior advisors to the Board. These include Yair Briman, the former CEO of Philips Healthcare Informatics, Daniel McCaffrey MBA MA, a world-renowned behavioral scientist and digital health expert currently VP of Digital Health and Software at OMRON Healthcare, Inc. and formerly at Samsung Health and Dexcom, Inc., Dr. Alexander Raykhman PhD, a measurement and artificial intelligence expert and Dr. David C. Klonoff, world renowned endocrinologist and diabetes technology thought leader. We intend to continue to invest in our talent and to expand and strengthen all areas within the Company. Recent Events On October 19, 2021, Paul V. Goode was appointed as President and Chief Operating Officer of the Company, effective November 1, 2021 (“Effective Date”). He has served as a member of Integrity’s Board of Directors since December 17, 2020. Concurrent with his new appointment, Mr. Goode stepped down from the Board. As of the filing of this Quarterly Report, Mr. Goode has been appointed Chief Executive Officer. 11 In connection with our application to list our shares of common stock on Nasdaq Capital Market (“NASDAQ”), on August 13, 2021, we effected a reverse split of our common stock in a ratio of 1 for 13 (the “Reverse Share Split”). On September 27, 2021, our shelf registration statement on Form S-3 (file no. 333-259664) was declared effective by the SEC. The shelf registration statement permits us to register up to $100,000,000 of certain equity and debt securities of the Company via prospectus supplement. On December 8, 2021, we announced that our shares of common stock were approved for listing on the NASDAQ. Trading on NASDAQ commenced on December 10, 2021, under its existing trading symbol, IGAP. On March 14, 2022, we changed our name to GlucoTrack, Inc. with Nasdaq and our trading symbol to GCTK. On March 22, 2022, Shalom Shushan, Chief Technology Officer, provided notice of his resignation from the Company, effective May 22, 2022, for personal reasons. In connection with the Company’s previously announced plans to migrate certain aspects of product development to the United States, James P. Thrower PhD, Vice President of Engineering, will be assuming Mr. Shushan’s responsibilities. In connection with the Company’s previously announced plans to migrate certain aspects of the product development of GT 2.0 to the United States, as well as in preparation for U.S. clinical trials, Erez Ben-Zvi, VP of Product in Israel, resigned from the Company, effective June 12, 2022. On October 10, 2022, the Company announced that it has acquired certain IP related to a long-term implantable continuous glucose monitor and that it intends to develop the technology to address the growing Type 1 and insulin dependent Type 2 diabetes market. On October 14, 2022, the Company announced the hiring of Dr. Mark Tapsak as Vice President of Sensor Technology. The summary of our significant accounting policies is included under Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of our fiscal 2021 Form 10-K. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements. There have been no material changes to the critical accounting policies and estimates as filed in such report. Critical Accounting Policies This Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends, and other factors that management believes to be relevant at the time our consolidated financial statements are prepared. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. As applicable to the consolidated financial statements included elsewhere in this report, the most significant estimates and assumptions relate to the going concern assumptions. 12 Results of Operations The following discussion of our operating results explains material changes in our results of operations for the three and nine months period ended September 30, 2022 compared with the same period ended September 30, 2021. The discussion should be read in conjunction with the financial statements and related notes included elsewhere in this report. Three Months ended September 30, 2022 compared to Three Months ended September 30, 2021 Research and development expenses Research and development expenses were $434 thousand for the three-month period ended September 30, 2022, as compared to $447 thousand for the prior-year period. The Decrease is immaterial. Research and development expenses consist primarily of salaries and other personnel-related expenses, materials, clinical trials, and other expenses. We expect research and development expenses to increase in 2022 and beyond, primarily due to hiring additional personnel and developing and validating our next generation product line, however, we may adjust or allocate the level of our research and development expenses based on available financial resources and based on our commercial needs, including the FDA registration process, specific requirements from customers, development of new GlucoTrack® models and others. Marketing expenses Marketing expenses were $0 thousand for the three-month period ended September 30, 2022, as compared to $113 thousand for the prior-year period. The decrease is primarily attributable to the Company’s decision to reduce/stop its marketing expenses until the completion of the development of the GlucoTrack® 2.0. Marketing expenses during the three-month period ended September 30, 2021, consisted in primarily of professional services, salaries, travel expenses and other related expenses. General and administrative expenses General and administrative expenses were $495 thousand for the three-month period ended September 30, 2022, as compared to $207 thousand for the prior-year period. The increase is primarily attributable to the additional expenses that the company accrued due to its listing on the Nasdaq Capital Market (“NASDAQ”). General and administrative expenses consist primarily of professional services, salaries, insurance, travel expenses and other related expenses for executive, finance, and administrative personnel, including stock-based compensation expenses. Other general and administrative costs and expenses include facility-related costs not otherwise included in research and development costs and expenses, and professional fees for legal and accounting services. Financing income, net Financing income, net was approximately $2 thousand for the three-month period ended September 30, 2022, as compared to financing income of $9 thousand for the prior-year period. The decrease in the financing income is mainly attributed to the decrease in interest income resulting from the reduction in the company’s cash balance over the year. Net Loss Net loss was $928 thousand for the three-month period ended September 30, 2022, as compared to $804 thousand for the prior-year period. The increase in net loss is attributable primarily to the increase in our operating expenses, as described above. 13 Nine Months ended September 30, 2022 compared to Nine Months ended September 30, 2021 Research and development expenses Research and development expenses were $1,363 thousand for the nine-month period ended September 30, 2022, as compared to $1,077 thousand for the prior-year period. The increase is primarily attributable to developing and validating our next generation product line. Research and development expenses consist primarily of salaries and other personnel-related expenses, materials, clinical trials, and other expenses. We expect research and development expenses to increase in 2022 and beyond, primarily due to hiring additional personnel and developing and validating our next generation product line, however, we may adjust or allocate the level of our research and development expenses based on available financial resources and based on our commercial needs, including the FDA registration process, specific requirements from customers, development of new GlucoTrack® models and others. Marketing expenses Marketing expenses were $0 thousand for the nine-month period ended September 30, 2022, as compared to $136 thousand for the prior-year period. The decrease is primarily attributable to the Company’s decision to reduce/stop its Selling and marketing expenses until the completion of the development of the GlucoTrack® 2.0. Marketing expenses consisted primarily of professional services, salaries, travel expenses and other related expenses. General and administrative expenses General and administrative expenses were $1,782 thousand for the nine-month period ended September 30, 2022, as compared to $1,323 thousand for the prior-year period. The increase is primarily attributable to hiring of new and augmented personnel to move forward our business agenda, and to additional expenses that the company accrued due to its listing on the Nasdaq Capital Market (“NASDAQ”). General and administrative expenses consist primarily of professional services, salaries, insurance, travel expenses and other related expenses for executive, finance, and administrative personnel, including stock-based compensation expenses. Other general and administrative costs and expenses include facility-related costs not otherwise included in research and development costs and expenses, and professional fees for legal and accounting services. Financing income (expenses), net Financing income (expenses), net was approximately $(2) thousand for the nine-month period ended September 30, 2022, as compared to financing income of $21 thousand for the prior-year period. The decrease in the financing income is attributed to the decrease in interest income resulting from the reduction in the company’s cash balance over the year. Net Loss Net loss was $3,148 thousand for the nine-month period ended September 30, 2022, as compared to $2,561 thousand for the prior-year period. The increase in net loss is attributable primarily to the increase in our operating expenses, as described above. 14 Going Concern Uncertainty As of September 30, 2022, cash on hand was approximately $3.2 million. The development and commercialization of non-invasive glucose monitoring devices for use by people, are expected to require substantial further expenditures. We remain dependent upon external sources for financing our operations. Since inception, we have incurred substantial accumulated losses and negative operating cash flow and have a significant accumulated deficit. These factors raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. We plan to finance our operations through the sale of equity (including shelf registration statement on Form S-3 was declared effective on September 27, 2021 by the Securities and Exchange Commission (SEC) 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 we will succeed in obtaining the necessary financing to continue our operations. Net Cash Used in Operating Activities for the Nine-Month Periods Ended September 30, 2022 and September 30, 2021 Net cash used in operating activities was $2,789 thousand and $2,796 thousand for the nine-month periods ended September 30, 2022 and 2021, respectively. Net cash used in operating activities primarily reflects the net loss for those periods of $3,148 thousand and $2,561 thousand, respectively. Net Cash Used (provided ) in Investing Activities for the Nine-Month Periods Ended September 30, 2022 and September 30, 2021 Net cash used (provided) in investing activities was $4 and $(3) thousand for the nine-month periods ended September 30, 2022 and 2021, respectively, and was used (provided) mostly to purchase and sale of equipment. Off-Balance Sheet Arrangements As of September 30, 2022, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K . Item 3. Quantitative and Qualitative Disclosures About Market Risk. Not required for smaller reporting companies. Item 4. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Principal Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2022, or the Evaluation Date. Based on such evaluation, those officers have concluded that, as of the Evaluation Date, our disclosure controls and procedures are ineffective in recording, processing, summarizing and reporting, on a timely basis, information required to be included in periodic filings under the Exchange Act and that such information is not accumulated and communicated to management, including our principal executive and financial officers, in a manner sufficient to allow timely decisions regarding required disclosure, due to the material weaknesses in internal control over financial reporting. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 15 PART II - OTHER INFORMATION Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. None Item 3. Defaults Upon Senior Securities None Item 4. Mine Safety Disclosures None Item 6. Exhibits. Exhibit No. Description 31.1 Certification of Principal Executive Officer and Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of Principal Executive Officer and Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS Inline XBRL Instance Document 101.SCH Inline XBRL Schema Document 101.CAL Inline XBRL Calculation Linkbase Document 101.LAB Inline XBRL Label Linkbase Document 101.PRE Inline XBRL Presentation Linkbase Document 101.DEF Inline XBRL Definition Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) 16 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: November 14, 2022 GLUCOTRACK, INC. By: /s/ Jolie Kahn Name: Jolie Kahn Title Chief Financial Officer (Principal Executive and Financial Officer) 17