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Item 1. Financial Statements

2023-08-14 compared with 2023-05-12 · 182 added, 143 removed, 62 unchanged (84% of the section changed)

20 unchanged sentences

Common Stock of $ 0.001 par value (“Common Stock”):

500,000,000 shares authorized;

15,503,632 and 15,500,730 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

Common Stock of $ 0.001

par value (“Common Stock”):

shares authorized;

and 15,500,730

shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

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

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

Additional paid-in capital

6 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

In thousands of US dollars

(except share data)

Three-month period ended March 31,

Research and development expenses

General and administrative expenses

US dollars (except share data)

period ended June 30,

Research and development

General and administrative

Total operating expenses

Operating Loss

Financing expense, net

Loss for the period

Finance Income (Expenses), net

Other comprehensive income:

Foreign currency translation income

Foreign currency translation adjustment

Comprehensive loss for the period

Loss per share (Basic and Diluted)

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

Basic net loss per common stock

Diluted net loss per common stock

Weighted average number of common shares used in computing basic and diluted loss per common stock

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

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

account of shares

Comprehensive

Stockholders’

thousands of US dollars (except share data)

account of shares

Comprehensive

Income (Loss)

Stockholders’

at January 1, 2022

for the period

comprehensive income

of restricted

shares as compensation towards directors (*)

as of March 31, 2022

thousands of US dollars (except share data)

account of shares

In thousands of US Dollars (except share data)

Comprehensive

Income (Loss)

Stockholders’

at January 1, 2023

for the period

comprehensive income

of restricted

shares as compensation towards directors (*)

shares to be issued as compensation towards directors

as of March 31, 2023

Actual issuance occurred subsequent to the balance

Balance at January 1, 2023

$ ( 101,901 )

Loss for the period

Other comprehensive income

Deemed dividend resulted from trigger of down round protection feature of certain warrants granted

Issuance of Ordinary Shares upon completion of public offering, net of offering expenses

Issuance of restricted shares as compensation towards directors and officer

Stock-based compensation

Balance at June 30, 2023

$ ( 105,218 )

Balance at April 1, 2023

$ ( 103,187 )

Loss for the period

Other comprehensive income

Deemed dividend resulted from trigger of down round protection feature of certain warrants granted

Issuance of Ordinary Shares upon completion of public offering, net of offering expenses

Issuance of restricted shares as compensation towards directors and officer

Stock-based compensation

Balance at June 30, 2023

$ ( 105,218 )

Balance at January 1, 2022

Loss for the period

Other comprehensive income

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

Stock-based compensation

Balance at June 30, 2022

Balance at April 1, 2022

Beginning balance

Loss for the period

Other comprehensive income

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

Stock-based compensation

Balance at June 30, 2022

Ending balance

amount lower than $1.

issuance occurred subsequent to the balance sheet date.

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

In Thousands of US dollars

Three-month period ended

Six-month period ended June 30.

CASH FLOWS FROM OPERATING ACTIVITIES

Loss for the period

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

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

Stock-based compensation

3 unchanged sentences

Increase in other current assets

Decrease in accounts payable

Increase in other current liabilities

Increase in accounts payable

Increase (Decrease) in other current liabilities

Net cash used in operating activities

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

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Net proceeds received from underwritten U.S.

public offering

Net cash provided by financing activities

Effect of exchange rate changes on cash and 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 at end of the period

Actual issuance occurred subsequent to the balance

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

Non-cash financing activities

Deemed dividend upon trigger of down round protection

issuance occurred subsequent to the balance sheet date.

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

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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.

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.

Company and Integrity Israel are considered collectively 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.

(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

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.

and Going Concern Uncertainty

date, the Company has not yet generated significant revenues from selling of GlucoTrack 1.0 product.

In addition, development and

commercialization of GlucoTrack 2.0 product is expected to require substantial expenditures and therefore the Company is dependent

upon external sources for financing its operations.

As of March 31, 2023, the Company has incurred accumulated deficit of $ 103,187

Further, the Company has generated operating losses and negative operating cash flow for all reported periods.

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

As of June 30, 2023, the Company has incurred accumulated deficit of $ 105,218

Furthermore, the Company has generated operating losses and negative operating cash flow for all reported

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 are not raising substantial doubt about the Company’s

ability to continue as a going concern, taking into consideration, the balance of cash and cash equivalents As of March 31, 2023

which amounted to $ 1,003 , together with the net proceeds in total amount of $ 8,730 thousand which were received upon closing of

a public offering through prospectus supplement on Form S-3 (see also Note 3) on April 17 2023.

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.

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

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.

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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, 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.

under those rules, certain information and footnote disclosures normally required or included in financial statements prepared in

accordance with U.S.

Basic of Presentation

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.

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 three months ended March 31, 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.

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

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 to 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.

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.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont.)

3 - SUBSEQUENT EVENTS

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.

of Consolidation

consolidated financial statements include the accounts of the Company and its subsidiary.

Significant intercompany balances and transactions

have been eliminated in consolidation.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

Basic of Presentation

Loss Per Common Stock

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.

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

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.

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:

OF ANTIDILUTIVE NET LOSS AND WEIGHTED AVERAGE

US dollars (except share data)

Six-month period ended June 30,

Three-month period ended June 30,

Deemed dividend related to trigger of down round protection feature (see Note 3A below)

Net loss attributable to common stockholders

Ordinary shares used in computing basic and diluted net loss per common stock

(*) 18,532,553

(*) 21,561,473

Basic and diluted net loss per common stock

(*) Including pre-funded

warrants issued upon completion of underwritten U.S.

public offering.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONT.)

3 - SIGNIFICANT TRANSACTIONS

of underwritten U.S.

public offering

April 13, 2023, the Company completed an underwritten U.S.

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 .

satisfaction of customary closing conditions, the closing date of the public offering was April 17, 2023 (the “Closing Date”).

the Company receives substantially all of the pre-funded warrant’s proceeds upfront (without any conditions) as part of the pre-funded

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 .

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 will be accounted for and classified as additional paid-in capital as part of the Company’s stockholders’

total incremental and direct issuance costs amounted to $ 1,270 thousand.

These expenses will be deducted from additional paid-in capital

as they should be allocated to shares of common stock and pre-funded warrants.

November 22, 2022, Nasdaq provided notice that pursuant to Nasdaq Listing Rule 5550(b)(1), the Company is required to maintain a

minimum of $ 2,500

thousand in stockholders’ equity.

In addition, the Company does not meet the alternatives of market value of listed securities

or net income from continuing operations.

Upon closing of underwritten U.S.

public offering, the Company meets the requirement

under the above rule as on a pro forma basis, with giving effect to approximately $ 8,730 thousand net raise, the balance sheet as of

March 31, 2023 has assets of approximately $ 9,777 thousand and shareholders’ equity of $ 8,741 thousand.

Thus, pre-funded warrants were accounted for and were classified as additional paid-in capital as part of the Company’s stockholders’

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.

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.

Property Purchase Agreement

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”).

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.

of Delisting or Failure to Satisfy a Continued Listing Rule or Standard

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.

4 - SUBSEQUENT EVENTS

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.

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