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Item 2. Management’s Discussion and Analysis

2023-08-14 compared with 2023-05-12 · 104 added, 112 removed, 108 unchanged (67% of the section changed)

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1 of this Quarterly Report on Form 10-Q.

are a medical device company focused on the design, development and commercialization of novel technologies for use by people with diabetes and prediabetes.

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.

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 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

on developing its next generation non-invasive monitor (“GlucoTrack 2.0”), and we have since withdrawn our CE Mark and ISO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.

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.

testing has produced promising results, suggesting measurement accuracies could be relatively comparable with those of conventional,

already in-the-market CGM technologies.

We expect to begin our first-in-human (FIH) study in the second or third quarter of 2023.

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 late in the fourth quarter of 2023.

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.

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 are currently in the feasibility phase to demonstrate the potential of a multi-year implant life.

We intend to complete the feasibility

study in the second quarter of 2023.

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.

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.

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.

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

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.

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.

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.

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

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.

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.

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.

Senior Management team includes;

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Goode PhD, who has a decorated career developing innovative medical technologies,

including at DexCom and MiniMed, James P.

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.

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.

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.

October 19, 2021, Paul V.

Goode PhD was appointed as President and Chief Operating Officer of the Company, effective November 1, 2021

(“Effective Date”).

He previously served as a member of the Company’s Board of Directors since December 17, 2020.

with his new appointment, Dr.

Goode stepped down from the Board.

In December 2021, Mr.

Goode has been appointed Chief Executive Officer.

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”).

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.

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 the trading symbol IGAP.

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.

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.

Raykhman PhD, a measurement and artificial intelligence expert and Dr.

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.

March 14, 2022, we changed our name to GlucoTrack, Inc.

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Nonbinding Say on Pay

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 $10.0 million, before deducting underwriting discounts and other estimated expenses payable by

The offering consisted of 7,352,942 shares of common stock and 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.

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.

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.

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.

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.

bench testing confirmed that a minimum two-year implant longevity is highly probable with the current sensor design.

longevity was independently verified by a third-party using sensor parameters to simulate sensor performance over time.

positive results of the study, the Company is now preparing for long-term animal studies, which are expected to begin later this

summary of our significant accounting policies is included under Item 7 – Management’s Discussion and Analysis of Financial

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of Operations

following discussion of our operating results explains material changes in our results of operations for the three months period ended

March 31, 2023 compared with the same period ended March 31, 2022.

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.

Months ended March 31, 2023 compared to Three Months ended March 31, 2022

Months ended June 30, 2023 compared to Six Months ended June 30, 2022

and development expenses

and development expenses were $642 thousand for the three-month period ended March 31, 2023, as compared to $460 thousand for the prior-year

The increase is attributable to professional fees we accrued during the year.

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

The increase is attributable to professional fees we accrued during the period.

and development expenses consist primarily of salaries and other personnel-related expenses, materials, clinical trials and other expenses.

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and administrative expenses

and administrative expenses were $642 thousand for the three-month period ended March 31, 2023, as compared to $633 thousand for the

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 increase is immaterial

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.

expenses ,net

expenses, net was approximately $2 thousand for the three-month period ended March 31, 2023, as compared to financing income of $0 thousand

The decrease is attributable to professional fees we accrued during the period.

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.

income (expenses), net

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 increase is immaterial .

loss was $1,286 thousand for the three-month period ended March 31, 2023, as compared to $1,093 thousand for the prior-year period.

The change is immaterial.

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.

increase in net loss is attributable primarily to the increase in our operating expenses, as described above.

Concern Uncertainty

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.

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 March 31, 2023, cash on hand was approximately $1,003 thousand which together with

the proceeds received upon completion of the aforesaid underwriting U.S.

public offering is sufficient to continue the operation for

a period of twelve-months subsequent to the reporting period.

Cash Used in Operating Activities for the Three-Month Periods Ended March 31, 2023 and March 31, 2022

cash used in operating activities was $1,313 thousand and $1,265 thousand for the three-month periods ended March 31, 2023 and 2022,

respectively.

Net cash used in operating activities primarily reflects the net loss for those periods of $1,286 thousand and $1,093 thousand,

respectively.

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.

Cash Used in Operating Activities for the Six-Month Periods Ended June 30, 2023 and June 30, 2022

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.

Cash Used in Investing Activities for the Six-Month Periods Ended June 30, 2023 and June 30, 2022

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.

Cash Used in Financing Activities for the Six-Month Periods Ended June 30, 2023 and June 30, 2022

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.

Sheet Arrangements

of March 31, 2023, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K .

of June 30, 2023, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

Quantitative and Qualitative Disclosures About Market Risk.

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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 2. Management’s Discussion and Analysis