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 June 30, 2023 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.) 301 Route 17 North , Suite 800 Rutherford , NJ 07070 (Address of principal executive offices) (Zip Code) (201) 842-7715 (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 August 11, 2023, 20,892,193 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. 14 Item 4. Controls and Procedures. 14 PART II - OTHER INFORMATION 15 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 15 Item 6. Exhibits. 15 EXHIBIT INDEX 15 SIGNATURES 16 2 GLUCOTRACK INC. PART I - FINANCIAL INFORMATION Item 1. Financial Statements GLUCOTRACK INC. CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2023 December 31, 2022 In thousands of US dollars (except share data) June 30, 2023 December 31, 2022 (Unaudited) Current Assets Cash and cash equivalents $ 8,774 $ 2,312 Other current assets 171 67 Total current assets 8,945 2,379 Property and equipment, net 27 40 Restricted Cash 10 19 TOTAL ASSETS 8,982 2,438 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Accounts payable 832 672 Other current liabilities 218 341 Total Current Liabilities $ 1,050 $ 1,013 Non-current Liabilities Loans from Stockholders 189 195 Total Non-current liabilities 189 195 Total Liabilities 1,239 1,208 Stockholders’ Equity Common Stock of $ 0.001 par value (“Common Stock”): 500,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 20,892,193 and 15,500,730 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively 20 15 Common Stock of $ 0.001 par value (“Common Stock”) : 500,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 20,892,193 and 15,500,730 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively 20 15 Additional paid-in capital 112,918 103,095 Accumulated other comprehensive income 28 17 Receipts on account of shares - 4 Accumulated deficit ( 105,218 ) ( 101,901 ) Total Stockholders’ equity 7,743 1,230 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 8,982 $ 2,438 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 GLUCOTRACK INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS 2023 2022 2023 2022 US dollars (except share data) US dollars (except share data) Six-month period ended June 30, Three-month period ended June 30, (Unaudited) (Unaudited) 2023 2022 2023 2022 Research and development $ 1,269 $ 929 $ 627 $ 469 General and administrative 1,194 1,287 552 654 Total operating expenses 2,463 2,216 1,179 1,123 Operating Loss 2,463 2,216 1,179 1,123 Finance Income (Expenses), net ( 1 ) 4 ( 3 ) 4 Net Loss 2,462 2,220 1,176 1,127 Other comprehensive income: Foreign currency translation adjustment ( 11 ) ( 37 ) ( 6 ) ( 30 ) Comprehensive loss for the period $ 2,451 $ ( 2,183 ) $ 1,170 $ ( 1,097 ) Basic net loss per common stock $ ( 0.18 ) $ ( 0.14 ) $ ( 0.09 ) $ ( 0.07 ) Diluted net loss per common stock $ ( 0.18 ) $ ( 0.14 ) $ ( 0.09 ) $ ( 0.07 ) Weighted average number of common shares used in computing basic and diluted loss per common stock 18,532,553 15,465,692 21,561,473 15,473,813 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 of shares Comprehensive Income (Loss) Accumulated Deficit Stockholders’ Equity In thousands of US Dollars (except share data) (Unaudited) Common Stock Additional Receipts on account Accumulated Other Total Numbers of Shares Amount Paid-in Capital of shares Comprehensive Income (Loss) Accumulated Deficit Stockholders’ Equity Balance at January 1, 2023 15,550,730 $ 15 $ 103,095 $ 4 $ 17 $ ( 101,901 ) $ 1,230 Loss for the period - - - - - ( 2,462 ) ( 2,462 ) Other comprehensive income - - - - 11 - 11 Deemed dividend resulted from trigger of down round protection feature of certain warrants granted - - 855 - - ( 855 ) - Issuance of Ordinary Shares upon completion of public offering, net of offering expenses 5,376,472 5 8,725 - - - 8,730 Issuance of restricted shares as compensation towards directors and officer 14,991 - (*) 9 ( 4 ) - - 5 Stock-based compensation - - 229 - - - 229 Balance at June 30, 2023 20,892,193 $ 20 $ 112,913 $ - $ 28 $ ( 105,218 ) $ 7,743 Balance at April 1, 2023 15,503,632 $ 15 $ 103,156 $ 5 $ 22 $ ( 103,187 ) $ 11 Loss for the period - - - - - ( 1,176 ) ( 1,176 ) Other comprehensive income - - - - 6 - 6 Deemed dividend resulted from trigger of down round protection feature of certain warrants granted - - 855 - - ( 855 ) - Issuance of Ordinary Shares upon completion of public offering, net of offering expenses 5,376,472 5 8,725 - - - 8,730 Issuance of restricted shares as compensation towards directors and officer 12,089 - (*) 5 ( 5 ) - - - Stock-based compensation - - 172 - - - 172 Balance at June 30, 2023 20,892,193 $ 20 $ 112,913 $ - $ 28 $ ( 105,218 ) $ 7,743 Balance at January 1, 2022 15,452,285 $ 15 $ 102,612 $ - $ ( 6 ) $ ( 97,466 ) $ 5,155 Loss for the period ( 2,220 ) ( 2,220 ) Other comprehensive income - - - - 37 - 37 Issuance of restricted shares as compensation towards directors (**) 7,872 - (*) 11 9 - - 20 Stock-based compensation 13,105 - 198 - - - 198 Balance at June 30, 2022 15,473,262 $ 15 $ 102,821 $ 9 $ 31 $ ( 99,686 ) $ 3,190 Balance at April 1, 2022 15,452,285 $ 15 $ 102,763 $ 11 $ 1 $ ( 98,559 ) $ 4,231 Beginning balance 15,452,285 $ 15 $ 102,763 $ 11 $ 1 $ ( 98,559 ) $ 4,231 Loss for the period - - - - - ( 1,127 ) ( 1,127 ) Other comprehensive income - - - - 30 - 30 Issuance of restricted shares as compensation towards directors (**) 7,872 - (*) 11 ( 2 ) - - 9 Stock-based compensation 13,105 - (*) 47 - - - 47 Balance at June 30, 2022 15,473,262 $ 15 $ 102,821 $ 9 $ 31 $ ( 99,686 ) $ 3,190 Ending balance 15,473,262 $ 15 $ 102,821 $ 9 $ 31 $ ( 99,686 ) $ 3,190 (*) Represents amount lower than $1. (**) 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 2023 2022 US Dollars Six-month period ended June 30. 2023 2022 (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Loss for the period $ ( 2,462 ) $ ( 2,220 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 7 14 Stock-based compensation 229 198 Issuance of restricted shares as compensation towards directors 5 20 (*) Linkage difference on principal of loans from stockholders 6 6 Changes in assets and liabilities: Increase in other current assets ( 104 ) ( 331 ) Increase in accounts payable 173 18 Increase (Decrease) in other current liabilities ( 121 ) 114 Net cash used in operating activities ( 2,267 ) ( 2,181 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment - ( 4 ) Net cash used in investing activities - ( 4 ) CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds received from underwritten U.S. public offering 8,730 - Net cash provided by financing activities 8,730 - Effect of exchange rate changes on cash and cash equivalents, and restricted cash ( 10 ) ( 30 ) Change in cash, cash equivalents, and restricted cash 6,453 ( 2,215 ) Cash, cash equivalents, and restricted cash at beginning of the period 2,331 6,113 Cash, cash equivalents, and restricted cash, end of period $ 8,784 $ 3,898 Non-cash financing activities Deemed dividend upon trigger of down round protection $ 855 $ - (*) 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. The Company is a medical device company, focused on the design, development and commercialization of novel technologies for use by people with diabetes and prediabetes. The Company is currently developing two products; a non-invasive glucose monitor for use by persons with Type 2 diabetes and prediabetes, and an implantable continuous glucose monitor for persons with Type 1 diabetes and insulin-dependent Type 2 diabetes. B. Liquidity and Going Concern Uncertainty To date, the Company has not yet generated significant revenues from selling of GlucoTrack 1.0 product, a product that has been discontinued. In addition, development and commercialization of both GlucoTrack 2.0 product and the implantable continuous glucose monitor is expected to require substantial expenditures;therefore, the Company is dependent upon external sources for financing its operations. As of June 30, 2023, the Company has incurred accumulated deficit of $ 105,218 thousand. Furthermore, the Company has generated operating losses and negative operating cash flow for all reported periods. Management has considered the significance of such conditions in relation to the Company’s ability to meet its current obligations and to achieve its business targets and determined that these conditions do not raise substantial doubt about the Company’s ability to continue as a going concern, taking into consideration the net proceeds received in total amount of $ 8,730 thousand upon closing of a public offering through prospectus supplement on Form S-3 on April 17 2023 (see also Note 3 below). Based on its assessment, management believe that such funds are sufficient for the Company to realize its business plans for the twelve months subsequent to the reporting period. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basic of Presentation 1. Accounting Principles The accompanying unaudited condensed consolidated interim financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on March 31, 2023. 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 period of six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any other interim period or for any future period. 2. 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. 7 GLUCOTRACK INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.) A. Basic of Presentation 3. Net Loss Per Common Stock Basic net loss per Common Stock is computed by dividing the loss for the period applicable for holders of Common Stock and pre-funded warrants by the weighted average number of shares of Common Stock and pre-funded warrants outstanding during the period. Diluted loss per share gives effect to all potentially dilutive common shares outstanding during the period using the treasury stock method with respect to stock options and certain stock warrants. In computing diluted loss per Common Stock, 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 to be issued upon exercise of all stock options and stock warrants have been excluded from the calculation of the diluted net loss per Common Stock for all the reported periods for which net loss was reported because the effect of the Common Stock issuable upon exercise of these instruments was anti-dilutive. The net loss and the weighted average number of shares of Common Stock used in computing basic and diluted net loss per Common Stock for the period of six and three months ended June 30, 2023 and 2022, is as follows: SCHEDULE OF ANTIDILUTIVE NET LOSS AND WEIGHTED AVERAGE 2023 2022 2023 2022 US dollars (except share data) US dollars (except share data) Six-month period ended June 30, Three-month period ended June 30, (Unaudited) (Unaudited) 2023 2022 2023 2022 Numerator: Net loss $ 2,462 $ 2,220 $ 1,176 $ 1,127 Deemed dividend related to trigger of down round protection feature (see Note 3A below) 855 - 855 - Net loss attributable to common stockholders $ 3,317 $ 2,220 $ 2,031 $ 1,127 Denominator: Ordinary shares used in computing basic and diluted net loss per common stock (*) 18,532,553 15,465,692 (*) 21,561,473 15,473,813 Basic and diluted net loss per common stock $ ( 0.19 ) $ ( 0.14 ) $ ( 0.10 ) $ ( 0.07 ) (*) Including pre-funded warrants issued upon completion of underwritten U.S. public offering. 8 GLUCOTRACK INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONT.) NOTE 3 - SIGNIFICANT TRANSACTIONS A. Completion of underwritten U.S. public offering On April 13, 2023, the Company completed an underwritten public offering under which the Company received gross proceeds of approximately $ 10,000 thousand for issuance of (i) 5,376,472 shares of common stock and (ii) 1,976,470 pre-funded warrants at a price to the public of $ 1.36 per share. The pre-funded warrants are exercisable for the same number of shares of common stock and may be exercised at any time until exercised in full at an exercise price of $ 0.001 . Upon satisfaction of customary closing conditions, the closing date of the above underwritten public offering was April 17, 2023 (the “Closing Date”). The Company received substantially all the pre-funded warrant’s proceeds upfront (without any conditions) as part of the pre-funded warrant’s purchase price and in return the Company is obligated to issue fixed number of shares of common stock to the holders. Thus, pre-funded warrants were accounted for and were classified as additional paid-in capital as part of the Company’s stockholders’ equity. Total incremental and direct issuance costs amounted to $ 1,270 thousand. These expenses were deducted from additional paid-in capital as they were allocated to shares of Common Stock and pre-funded warrants. Upon closing of underwritten U.S. public offering, a down round protection feature of certain warrants granted in previous years to service providers was triggered by the way of reduction of their exercise price from a price in a range of $ 3.35 -$ 70.20 to a price of $ 1.36 which represented the above public offering price. Such reduction was accounted for as deemed dividend estimated at total amount of $ 855 thousand which was recorded as part of the additional paid-in capital versus increase of accumulated deficit. Regarding the effect of the loss per share, see also Note 2.A.3. above. B. Intellectual Property Purchase Agreement In the middle of June 2023, the Company achieved the first performance milestone out of the five performance milestones outlined in the Intellectual Property Purchase Agreement (the “Agreement”) executed between the Company and Paul Goode, which is the Company’s Chief Executive Officer (the “Seller”) as October 7, 2022 (the “Closing Date”). As result, the Company is committed to issue 100,000 restricted shares to the Seller. During the periods of three and six months ended June 30, 2023, the Company recorded stock-based compensation expenses amounted to $ 131 thousand which representing the quoted price of its Common Stock at the Closing Date, after taking into consideration a discount for lack of marketability in a rate of 30.4 % over a restriction period of 1-year. As of June 30, 2023, achievement of all other performance milestones was not considered probable and thus no stock-based compensation expenses were recorded with respect to thereof. C. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard On May 26, 2023, the Company received a letter from Nasdaq that it no longer complies with Rule 5550(a)(2) of Nasdaq’s Listing Rules (the “Rules”) which require listed securities to maintain a minimum bid price of $ 1 per share. However, the Rules provide the Company a compliance period of 180-days to regain compliance under which if at any time during 180-days period the closing bid price of the Company’s security is at least $ 1 for a minimum of ten consecutive business days, Nasdaq will provide the Company written confirmation of compliance and this matter will be closed. In the event the Company does not regain compliance by the 180th day, the Company may be eligible for additional time to regain compliance or may face delisting. NOTE 4 - SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed interim consolidated financial statements were issued (August 14, 2023). Based upon this review, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the 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, 2022. 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 are a medical device company focused on the design, development and commercialization of novel technologies for use by people with diabetes and prediabetes. We are currently developing two products; a non-invasive glucose monitor for use by those with Type 2 diabetes and prediabetes, and an implantable continuous glucose monitor for those with Type 1 diabetes and insulin-dependent Type 2 diabetes. The Company was founded with a mission to develop GlucoTrack®, a noninvasive glucose monitoring device designed to help people with diabetes and pre-diabetics obtain glucose level readings without the pain, inconvenience, cost and difficulty of conventional (invasive) spot finger stick devices. The first generation GlucoTrack (“GlucoTrack 1.0”), which successfully received CE Mark approval and ISO certifications, utilized a combination of ultrasound, electromagnetic and thermal technologies to obtain 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 or interstitial fluid. After a limited release beta test in Europe and the Middle East, the Company determined that it would focus its efforts on developing its next generation non-invasive monitor (“GlucoTrack 2.0”), and we have since withdrawn our CE Mark and ISO certifications for GlucoTrack 1.0 and are no longer pursuing commercialization of this product. I nstead, we are currently developing GlucoTrack 2.0. The current clinical prototype utilizes ultrasound-only sensor technology, reduces the overall cost and complexity of the device, and reduces the measurement time from approximately sixty seconds to less than two seconds. Initial testing has produced promising results, suggesting measurement accuracies could be relatively comparable with those of conventional, already in-the-market CGM technologies. Internal development efforts continue toward a robust measurement technique that consistently achieves significant measurement accuracy in normal use applications. A first-in-human (FIH) clinical study will begin once this metric has been achieved.. Collecting data for sensor characterization and algorithm development will be the primary goals of the FIH study. The results of this study will also drive the development of the commercial version of the device, which is expected to commence early 2024. Once the development of the commercial device version is complete, we intend to conduct a scaled down version of the FDA pivotal trial to resolve any lingering device performance or human factors issues prior to executing the larger pivotal trial for FDA submission. 10 Following the acquisition of certain IP in the fourth quarter of 2022, we are also developing an implantable continuous glucose monitor for use by Type 1 diabetes patients as well as insulin-dependent Type 2 patients. Implant longevity is key to the success of such a device, and we have recently completed our feasibility study successfully demonstrating that a minimum two-year implant life is highly probable with the current sensor design. We believe our technology, if successful, has the potential to be more accurate, more convenient and have a longer duration than other implantable glucose monitors that are either in the market or currently under development. We are currently developing our own companion applications and a cloud-based solutions to offer an effective platform to provide real time, data driven personalized tools to effectively help a user manage their diabetes, which will be utilized during the clinical trials. In addition to being a critical and effective management tool for the end user, we believe that third parties such as insurers, pharmaceutical companies and advertisers would be willing to pay for the de-identified data that we will obtain through our platform, and that this is an opportunity for us to develop an additional revenue source. Our Senior Management team includes; CEO and President, Paul V. Goode PhD, who has a decorated career developing innovative medical technologies, including at DexCom and MiniMed, CFO and General Counsel, Jolie Kahn, Esq., who has a multidecade career as a well respected securities attorney and finance professional, James P. Thrower PhD, Vice President of Engineering, a seasoned executive formerly of Sterling Medical Devices, Mindray DS USA and DexCom, Inc., and Mark Tapsak PhD, Vice President of Sensor Technology, a medical research scientist who brings over 25 years of experience in the diabetes industry, including previous senior roles at DexCom and Medtronic. 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 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 March 14, 2022, we changed our name to GlucoTrack, Inc. 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, assumed Mr. Shushan’s responsibilities. In connection with the Company’s previously announced plans to migrate certain aspects of the product development 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. 11 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. On November 22, 2022, Nasdaq provided notice that pursuant to Nasdaq Listing Rule 5550(b)(1), the Company did not meet the alternatives of market value of listed securities or net income from continuing operations. On January 4, 2023, Nasdaq provided notice that since the Company had not held an annual meeting of shareholders within twelve months of the end of the Company’s fiscal year end ended December 31, 2021, it no longer complied with Listing Rules for continued listing. On February 7, 2023, Nasdaq issued a letter to the Company granting an extension until May 22, 2023 to obtain compliance with the Listing Rule 5550(b). On March 31, 2023, GlucoTrack, Inc. held its 2022 Annual Meeting of Shareholders. The results of the voting with respect to this Annual Meeting are as set forth below. Directors Information Dir # Votes For Votes Withheld Broker Non-Vote % Votes For Dr. Robert Fischell 2,881,036.00 5,250,502.00 488,583.00 18.58 Luis Malave 2,880,918.00 5,250,620.00 488,583.00 18.58 Andrew Sycoff 2,945,847.00 5,185,691.00 488,583.00 19.00 Shimon Rapps 2,882,073.00 5,249,465.00 488,583.00 18.59 Allen Danzig 2,880,916.00 5,250,622.00 488,583.00 18.58 Proposals Information Prop # Votes For Votes Against Votes Abstain Broker Non-Vote % Votes For Ratify Auditor 8,612,584.00 7,481.00 56.00 0.00 55.55 Nonbinding Say on Pay 2,844,095.00 5,205,181.00 82,262.00 488,583.00 18.34 On April 17, 2023, the Company announced the closing of a firm commitment underwritten public offering of shares of its common stock with gross proceeds to the Company of approximately $10 million, before deducting underwriting discounts and other estimated expenses. The offering consisted of 5,376,472 shares of common stock and 1,976,470 pre-funded warrants to purchase shares of common stock at a price to the public of $1.36 per share (less $0.001 in exercise price per pre-funded warrant). The Company entered into an underwriting agreement with Aegis Capital Corp. on April 13, 2023. The Company intends to use the net proceeds from this offering primarily for working capital and general corporate purposes, which may include, without limitation, engaging in acquisitions or other business combinations or investments, sales and marketing activities, general and administrative matters and capital expenditures. On July 25, 2023, the Company announced the completion and positive results of its feasibility study for its implantable continuous glucose monitor technology for patients with Type 1 and Type 2 insulin-dependent diabetes. The primary goal of the feasibility study was to demonstrate that the CGM sensor design could reliably report glucose measurements for two years post-implant. Laboratory bench testing confirmed that a minimum two-year implant longevity is highly probable with the current sensor design. The implant longevity was independently verified by a third-party using sensor parameters to simulate sensor performance over time. Given the positive results of the study, the Company is now preparing for long-term animal studies, which are expected to begin later this year. 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 2022 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. 12 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, 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. Results of Operations The following discussion of our operating results explains material changes in our results of operations for the six month period ended June 30, 2023 compared with the same period ended June 30, 2022. The discussion should be read in conjunction with the financial statements and related notes included elsewhere in this report. Six Months ended June 30, 2023 compared to Six Months ended June 30, 2022 Research and development expenses Research and development expenses were $1,269 thousand for the six-month period ended June 30, 2023, as compared to $929 thousand for the prior-year period. The increase is attributable to professional fees we accrued during the period. 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 2023 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. General and administrative expenses General and administrative expenses were $1,194 thousand for the six-month period ended June 30, 2023, as compared to $1,287 thousand for the prior-year period. The decrease is attributable to professional fees we accrued during the period. General and administrative expenses consist primarily of professional services, salaries, consulting fees, 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 expenses, net was approximately $1 thousand for the six-month period ended June 30, 2023, as compared to financing income of $4 thousand for the prior-year period. The change is immaterial. Net Loss Net loss was $2,462 thousand for the six-month period ended June 30, 2023, as compared to $2,220 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 Going Concern Uncertainty The development and commercialization of GlucoTrack 2.0 product 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. However, in April 2023, we completed an underwriting U.S. public offering under which net proceeds of $8,730 thousand has been raised. As of June 30, 2023, our cash on hand is sufficient to continue our operations for a period of twelve-months subsequent to the reporting period. Net Cash Used in Operating Activities for the Six-Month Periods Ended June 30, 2023 and June 30, 2022 Net cash used in operating activities was $2,269 thousand and $2,181 thousand for the six-month periods ended June 31, 2023 and 2022, respectively. Net cash used in operating activities primarily reflects the net loss for those periods of $2,462 thousand and $2,220 thousand, respectively. Net Cash Used in Investing Activities for the Six-Month Periods Ended June 30, 2023 and June 30, 2022 Net cash used in investing activities was $0 thousand and $4 thousand for the six-month periods ended June 30, 2023 and 2022, respectively. Net cash used in investing activities primarily reflects the purchasing of fixed assets. Net Cash Used in Financing Activities for the Six-Month Periods Ended June 30, 2023 and June 30, 2022 Net cash provided by financing activities was $8,730 thousand and $0 thousand for the six-month periods ended June 30, 2023 and 2022, respectively. Net cash provided by financing activities primarily reflects the net proceeds received from public offering, net of offering expenses. Off-Balance Sheet Arrangements As of June 30, 2023, 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 June 30, 2023, 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 related to lack of sufficient internal accounting personnel, segregation of duties, and lack of sufficient internal controls (including IT general controls) that encompass the Company as a whole with respect to entity and transactions level controls in order to ensure complete documentation of complex and non-routine transactions and adequate financial reporting. Management has identified corrective actions to remediate such material weaknesses, which includes hiring additional employees. Management intends to implement procedures to remediate such material weaknesses during the fiscal year 2023; however, the implementation of these initiatives may not fully address any material weaknesses that we may have in our 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. 14 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) 15 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: August 14, 2023 GLUCOTRACK, INC. By: /s/ Jolie Kahn Name: Jolie Kahn Title Chief Financial Officer (Principal Financial Officer) 16