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Item 9A. Controls and Procedures

2024-03-28 compared with 2023-03-31 · 922 added, 598 removed, 383 unchanged (80% of the section changed)

2 unchanged sentences

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 December

31, 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 described below.

our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of

1924, as amended (the “Exchange Act”)) as of December 31, 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 described

Report on Internal Control Over Financial Reporting

8 unchanged sentences

that internal control over financial reporting as at December 31, 2023 were not effective.

As defined in Regulation 12b-2 under the Securities

Exchange Act, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting,

As defined in Regulation 12b-2 under the Exchange

Act, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting,

such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented,

14 unchanged sentences

Report of the Registered Public Accounting Firm

Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control

over financial reporting.

Management’s report was not subject to attestation by the Company’s registered public accounting

firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this Annual Report.

Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over

financial reporting.

Management’s report was not subject to attestation by the Company’s registered public accounting firm

pursuant to rules of the SEC that permit the Company to provide only management’s report in this Report.

Other Information.

1 unchanged sentence

Directors, Executive Officers, and Corporate Governance.

for the information about our Code of Ethics below, the information required by this Item 10 is incorporated by reference from our definitive

proxy statement for our 2022 Annual Meeting of Stockholders (the “Proxy Statement”).

The definitive Proxy Statement will

be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year covered by this Annual Report

on Form 10-K.

maintain a Code of Business Conduct and Ethics (Code) that applies to all employees, including our principal executive officer, principal

financial officer, principal accounting officer, controller and persons performing similar functions, and including our independent directors,

who are not employees of the Company, with regard to their Integrity-related activities.

The Code incorporates guidelines designed to

deter wrongdoing and to promote honest and ethical conduct and compliance with applicable laws, rules and regulations.

The Code also

incorporates our expectations of our employees that enable us to provide accurate and timely disclosure in our filings with the SEC and

other public communications.

In addition, the Code incorporates guidelines pertaining to topics such as complying with applicable laws,

rules, and regulations;

following individuals serve as Directors and Executive Officers of the Company as of the date of this Report.

Directors of the Company

hold office until the next annual meeting of our shareholders or until their successors have been elected and qualified.

Executive officers

of the Company are appointed by our board of directors and hold office until their death, resignation or removal from office.

directors serve for terms of one year each and are subject to re-election at Annual Meeting of Shareholders, unless they earlier resign.

are no material proceedings to which any of our directors, officers or affiliates, any owner of record or beneficially of more than five

percent of any class of our voting securities, or any associate of any such director, officer, affiliate, or security holder is a party

adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.

have attempted and will continue to attempt to ensure that any transactions between we and our officers, directors, principal shareholders,

or other affiliates have been and will be on terms no less favorable to us than could be obtained from unaffiliated third parties on

an arm’s length basis.

table below sets forth (1) the names and ages of our Directors as of the date of this Proxy Statement, (2) all positions with the Company

presently held by each such person and (3) the positions held by, and principal areas of responsibility of, each such person during the

last five years.

Robert Fischell

Member of the Audit, Nominating and Governance and Compensation Committees

Member of the Audit, Nominating and Governance and Compensation (Chair) Committees

Member of the Audit Committee

Chair of the Nominating and Governance Committee and Member of the Compensation Committee

Chair of the Audit Committee

Danzig has served on our Board since October 31, 2019 and is the Chair of our Nominating, Governance and Compensation Committee.

Danzig most recently served as Vice President, Assistant General Counsel and Assistant Secretary of L3Harris Technologies, Inc.,

a global aerospace and defense technology contractor, with $17 billion in annual revenue.

Prior to its merger with Harris Corporation

in June 2019, Mr.

Danzig served as Vice President, Assistant General Counsel and Assistant Secretary at L3 Technologies, Inc.

had been employed since 2006.

Prior to his employment at L3, Mr.

Danzig served in management positions with Celanese Corporation, a global

chemical and specialty materials company, and The Hertz Corporation, one of the world’s largest vehicle and equipment rental companies.

He received his undergraduate degree from Adelphi University and law degree from Pace University School of Law and is a member of the

New York State Bar.

The Board has determined that Mr.

Danzig is suited to serve due to his extensive legal and corporate governance experience.

Robert Fischell has served as one of GlucoTrack’s directors since 2010.

He also serves on GlucoTrack’s Nominating,

Governance and Compensation Committee.

Fischell is an inventor and serial entrepreneur with over 160 issued U.S.

Fischell spent over 30 years with the Johns Hopkins University Applied Physics Laboratory, which resulted in 53 patents

in both aerospace and biomedical technology.

His interests at Johns Hopkins then turned to the invention of new medical devices such

as pacemakers and implantable heart defibrillators.

Starting in 1969, Dr.

Fischell began the formation of 14 private companies that licensed

his patents on medical devices.

These companies include Pacesetter Systems, Inc.

(purchased by Siemens and now part of St.

Jude Medical,

Inc.), IsoStent, Inc.

(merged with Cordis Company, a Johnson and Johnson Company), NeuroPace, Inc., Neuralieve, Inc., Angel Medical Systems,

Inc., and Svelte Medical Systems, Inc.

As it relates to diabetes management devices, he was the inventor of the first implantable insulin

pump (which became Minimed, which was sold to Medtronic).

Fischell’s honors include Inventor of the Year for the USA in 1984,

election to the National Academy of Engineering in 1989, the Distinguished Physics Alumnus Award of the University of Maryland, and several

medals for distinguished accomplishments in science, engineering and innovation.

In 2004, Discover magazine gave Dr.

Fischell their annual

Technology for Humanity award.

Fischell received the honorary degree of Doctor of Humane Letters from the Johns Hopkins

University in recognition of his many lifesaving inventions.

From June 2009 until March 2011, Dr.

Fischell was a director of InspireMD,

NSPR), a medical device company focusing on the development and commercialization of its proprietary stent system, MGuard.

Fischell received his BSME degree from Duke University and MS and Sc.D.

degrees from the University of Maryland.

At the White House

on May 16, 2016, President Obama presented to Dr.

Fischell the National Medical of Technology and Innovation, the highest award in the

USA for achievements in innovative technology.

The Board has determined that Dr.

Fischell is suited to serve due to his extensive diabetes

and medical device experience.

Malave has served as a Director of the Company since June 22, 2021 and serves on

our Audit Committee and Nominating, Governance and Compensation Committee.

Malavé brings

more than 30 years of leadership experience in the MedTech industry, primarily in diabetes management, spanning all company stages, from

private startups to large-cap publicly listed companies.

He has extensive expertise in product development, operations, marketing, strategic

partnerships, and US FDA regulatory strategy.

Since October 2017, Mr.

Malavé has served as President of EOFLOW CO.

Ltd., a company

listed on the Korea Stock Exchange that has developed a wearable disposable insulin pump.

From October 2014 to June 2016, he was COO

of Mikroscan Technologies.

Prior to that, Mr.

Malavé was the President and CEO of Palyon Medical, maker of an implantable drug-delivery

system that spun out from German medical-technology giant Fresenius SE.

Prior to Palyon, he spent nearly a decade at insulin pump maker

Insulet Corp., including as its Senior Vice President of Research, Development and Engineering, and as Chief Operating Officer.

held various senior positions at Medtronic and MiniMed, overseeing product development of various diabetes management devices.

earned his Bachelor’s degree in Mathematics and Computer Science from the University of Minnesota, a Master’s degree in Software

Engineering from the University of St.

Thomas, and an MBA from the University of Maryland.

Rapps was appointed as a Director of the Company on July 31, 2019.

He is member of the Audit Committee.

Rapps currently serves

as Director of Venture and Private Equity for a New York based single family office and is the founder of Three Strands Capital Group,

a boutique merchant banking and investment advisory firm.

Previously he served as Head of Investment Banking at Andrew Garrett, Inc.,

a full-service investment bank and wealth management firm.

His experience spans equity and debt financings, mergers and acquisitions,

private placements and IPO’s.

He has extensive expertise with both public and private, emerging growth and lower middle market

companies, and regularly advises CEO’s, CFO’s and Boards of Directors on matters of corporate governance and strategy.

holds the Series 7, 24, 63, and 66 licenses and is a Certified Public Accountant (inactive).

The Board has determined that Mr.

is suited to serve due to his extensive investment banking and public company experience.

Sycoff has served as a Director of the Company since July 8, 2019, and is a member of the Nominating, Governance and Compensation

Sycoff is the founder, Chief Executive Officer and Chairman of the Board of Andrew Garrett, Inc., a full-service investment

bank providing wealth management and corporate advisory services, for which he has served as CEO and Chairman continuously since 1992.

Client sectors include high net worth individuals and early to middle market stage companies.

Sycoff holds Series 7 and 24 licenses.

Sycoff has been actively investing in and advising companies for over 25 years and has extensive experience in the areas of securities

brokerage, Capital Markets, Corporate Advisory and Mergers & Acquisitions.

Sycoff previously served on the board of Brokerage

America and Paragon Industries Corp., an electronics contract manufacturer.

The Board has determined that Mr.

Sycoff is suited to serve

due to his extensive investment banking and public company experience.

Carter has served as a Director of the Company since August 25, 2023, and is the Chair of its Audit Committee.

Carter brings

30 years of executive level finance experience in the medical device industry.

From 2012 until March of 2023, she held various senior

roles with Medtronic, most recently serving as Chief Financial Officer and Vice President of Finance for their $9B Neuroscience division.

In addition, during her tenure at Medtronic she grew the Gastrointestinal Solutions division from early tech start-up acquisition of

$36M to revenue of $450M in 5 years through organic growth and multiple acquisitions.

Prior to Medtronic, Ms.

Carter served as Director

of Finance at Boston Scientific and as VP of Accounting and Reporting at UnitedHealth Group.

Prior to that, she served as Assistant Controller

for Arterial Vascular Engineering, where she was instrumental in guiding the rapid growth of the company from 200 employees to over 4,000

in under five years.

During this time, she managed the integration of two acquisitions and subsequently that company’s sale to

Carter holds a B.S.

in Business Administration from California Polytech State University and is a Certified Public Accountant

(inactive) in the State of California.

EXECUTIVE OFFICERS

table below sets forth the names and ages of our executive officers as of the date of this Registration Statement and all positions with

the Company presently held by each such person.

Immediately following the table is biographical information for each of our executive

officers, including the positions held by, and principal areas of responsibility of, each such person during the last five years.

Executive Officer

Financial Officer

President of Engineering

President of Technology

President of Marketing

V Goode, PhD most recently served as Vice President of Product Development at Orchestra Biomed where he oversaw development of

its implantable cardiac stimulator system for hypertension.

Prior to Orchestra, from 2010 until July 2019 Paul served in several executive

roles at EndoStim, including Senior Vice President of R&D, Chief Technology Officer, and Interim CEO.

From 2006 through 2010 he served

as VP of Research and Development at Metacure and from 2004 through 2006 Mr.

Goode served as Director of Engineering at Impulse Dynamics.

Prior to that, Mr.

Goode was employed as Director of Engineering at DexCom and as Senior Engineer at MiniMed.

Paul received his BS, MS

and PhD degrees from North Carolina State University.

S Cardwell appointed October 11, 2023 has over 16 years of experience as a Chief Financial Officer and Chief Operating Officer

with a concentration in both SEC financial reporting and tax compliance.

He has served as the Chief Operating Officer of the CFO Squad

LLC, an accounting firm, since July 2015.

In connection with his role at the CFO Squad LLC, he also served as interim Chief Financial

Officer at several public entities and currently serving including Cerro de Pasco Resources, Inc.

(CSE:CDPR), a Canadian mining company;

Stemtech Corporation (OTC:GNTW) , a nutrition supplement company;

and previously served as CFO for NanoVibronix, Inc.

a medical device company;

Esports Entertainment Group (Nasdaq:

GMBL), an esports and online gambling company;

Artemis Acquisition Corporation,

a SPAC in the Healthcare Industry and others.

Cardwell started his public accounting career at Arthur Andersen & Co.

Cardwell has extensive experience in corporate structure, financial reporting and modelling, mergers and acquisition, quality of

earnings and business analysis, SEC reporting, tax and compliance.

P Thrower joined the Company in December 2021 as its second U.S.

He is a seasoned engineering and global product development

leader with a track record of successfully leading large healthcare technology-focused projects across multiple geographies from prototype

design through clinical trials and FDA submissions.

From June 2019 until December 2021, he held senior positions at Sterling Medical

Devices and from 2005 to June 2019 he held various senior positions at Mindray DS USA Inc.

Prior to that Mr.

Thrower was a senior software

and electrical engineer at DexCom, Inc.

He earned his bachelor’s degree in both Electrical Engineering and Computer Engineering,

as well as his MSc and PhD in Electrical Engineering from North Carolina State University.

He is a published author in numerous industry

publications and is a named inventor on over 120 patents.

Tapsak, PhD joined the Company in September 2022 as its Vice President of Technology.

Mark brings over 25 years of experience

in the diabetes industry as a medical device research scientist, focused on polymer synthesis, polymer characterization, medical device

design and intellectual property.

At GlucoTrack, he will lead the recently announced R&D program for a novel implantable CGM for those with Type 1 diabetes.

Mark joins the Company from Diabetic Health, Inc., a developer of specialty

coatings utilized in continuous glucose monitoring sensors and insulin infusion sets, where he served as President.

Over his career,

Mark held senior positions at several diabetes management companies including as Senior Scientist at DexCom where he oversaw sensor electrochemical

performance, biointerface design and membrane technology, and as Senior Chemist at Medtronic, Inc.

He has also taught as a Professor

of Chemistry and Biochemistry and served as the Assistant Dean of Science and Technology and as Dean of Graduate Programs and Sponsored

Research at Bloomsburg University.

He has authored dozens of industry publications with thousands of citations and is a named inventor

of 68 patents, of which over 50 are DexCom assigned patents.

He received his Bachelor of Educational Studies in Chemistry and Photographic

Sciences from St.

Cloud State University and his PhD in Polymer Chemistry from the University of Southern California.

Benjamin joined the Company in July 2023 as its Vice President of Marketing.

Drinda has 25 years of experience in the medical

device industry from diabetes to surgical robotics.

She brings extensive diabetes device experience with a focus on the commercialization

of health technology.

Within diabetes, she has past experiences in product development, strategic marketing, and both upstream and downstream

marketing in the areas of blood glucose monitoring, CGM, insulin delivery and closed loop systems.

joins the company from Intuity Medical where she developed and executed commercial strategies for a novel integrated blood glucose monitoring

Prior to this, she led business development, partnership strategy and closed loop system programs for Senseonics, manufacturer

of the 1st implantable CGM launched in the US and Europe.

She has also held marketing roles with Abbott Diabetes Care and Medtronic Diabetes.

Drinda has an M.B.A.

from Georgetown University’s McDonough School of Business and a Bachelor of Science in Engineering degree

from Princeton University.

maintain a Code of Business Conduct and Ethics (“Code”) that applies to all employees, including our principal executive

officer, principal financial officer, principal accounting officer, controller and persons performing similar functions, and including

our independent directors, who are not employees of the Company, with regard to their Integrity-related activities.

The Code incorporates

guidelines designed to deter wrongdoing and to promote honest and ethical conduct and compliance with applicable laws, rules and regulations.

The Code also incorporates our expectations of our employees that enables us to provide accurate and timely disclosure in our filings

with the SEC and other public communications.

In addition, the Code incorporates guidelines pertaining to topics such as complying with

applicable laws, rules, and regulations;

insider trading;

reporting Code violations;

and maintaining accountability for adherence to the Code.

text of our Code is published on our web site at http://www.integrity-app.com/investor-relations/corporate-governance/ and is incorporated

by reference herein.

We intend to disclose future amendments to certain provisions of our Code, or waivers of such provisions granted

to our principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar

functions on our web site.

Except as expressly stated herein, the information contained on our website does not constitute a part of

this Annual Report on Form 10-K and is not incorporated by reference herein.

and maintaining accountability for adherence to

The full text of our Code is published on our web site at http://www.integrity-app.com/investor-relations/corporate-governance/

and is incorporated by reference herein.

We intend to disclose future amendments to certain provisions of our Code, or waivers of such

provisions granted to our principal executive officer, principal financial officer, principal accounting officer or controller and persons

performing similar functions on our web site.

Except as expressly stated herein, the information contained on our website does not constitute

a part of this Report and is not incorporated by reference herein.

Audit Committee consists of Erin Carter, who is the chair of the committee, Shimon Rapps, and Luis Malave.

Our Board has determined that

each of the members of our Audit Committee satisfies the Nasdaq Marketplace Rules and SEC independence requirements.

The functions of

this committee include, among other things:

the performance, independence and qualifications of our independent auditors and determining whether to retain our existing independent

auditors or engage new independent auditors;

and approving the engagement of our independent auditors to perform audit services and any permissible non-audit services;

our annual and quarterly financial statements and reports, including the disclosures contained under the caption “Management’s

Discussion and Analysis of Financial Condition and Results of Operations” and discussing the statements and reports with our

independent auditors and management;

with our independent auditors and management significant issues that arise regarding accounting principles and financial statement

presentation and matters concerning the scope, adequacy, and effectiveness of our financial controls;

and approving, in accordance with the Company’s policies, any related party transaction as defined by applicable rules and

our major financial risk exposures, including the guidelines and policies to govern the process by which risk assessment and risk

management is implemented;

and evaluating on an annual basis the performance of the audit committee, including compliance of the audit committee with its charter.

Board has determined that Erin Carter qualifies as an “audit committee financial expert” within the meaning of applicable

SEC regulations and meets the financial sophistication requirements of the Nasdaq Marketplace Rules.

In making this determination, the

Board has considered her 30 years’ extensive financial experience and business background.

Both our independent registered public

accounting firm and management periodically meet privately with our Audit Committee.

Trading Policy

January 1, 2024, we adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities

by directors, officers, and employees, which are reasonably designed to promote compliance with insider trading laws, rules and regulations,

and applicable Nasdaq listing standards (the “Insider Trading Policy”).

foregoing description of the Insider Trading Policy does not purport to be complete and is qualified in its entirety by the terms and

conditions of the Insider Trading Policy, a copy of which is attached hereto as Exhibit 19 and is incorporated herein by reference.

With Section 16(a) of the Exchange Act

16(a) of the Exchange Act requires the Company’s directors, executive officers, and persons who own more than 10% of a registered

class of the Company’s equity securities, to file with the SEC reports of beneficial ownership and reports of changes in beneficial

ownership in the Company’s securities.

Based solely upon a review of Forms 3, 4 and 5, and amendments thereto, filed electronically

with the SEC during the year ended December 31, 2023, the Company believes that all Section 16(a) filings applicable to its directors,

officers, and 10% stockholders were filed on a timely basis during the year ended December 31, 2023, except that Erin Carter filed one

Executive Compensation.

information required for this Item is incorporated by reference from our Proxy Statement.

following table sets forth the compensation paid to our officers for the years ended December 31, 2023 and 2022.

This information includes

the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any.

The compensation

discussed addresses all compensation awarded to, earned by, or paid to named executive officers.

Name and Principal Position

Equity Awards (1)

All Other Compensation (2)

Chief Executive Officer

James Thrower

Vice President of Engineering

Mark Tapsak, PhD

Vice President of Technology

Chief Financial Officer

accordance with SEC rules, the amounts in this column reflect the dollar amounts to be recognized for financial statement reporting

purposes with respect to the years ended December 31, 2023 and 2022 in accordance with ASC Topic 718.

Fair value is based on the

Black-Scholes option pricing model using the market price of the underlying shares at the grant date.

The Company recognized $131,237

of stock compensation expense related to Common Stock due to Paul Goode after satisfying the first performance milestone of the Intellectual

Property Purchase Agreement signed in October 2022.

This milestone was the successful completion of the Feasibility Phase for the

Glucotrack CBGM project.

Kahn received $62,500 as compensation for services during the April 2023 financing and $36,000 severance as part of her separation

agreement with the Company.

and Consulting Agreements

October 11, 2023, in connection with Mr.

Cardwell’s appointment as the Company’s Chief Financial Officer, Mr.

Cardwell entered

into a consulting agreement (the “Cardwell Consulting Agreement”) with the Company.

Pursuant to the terms of the Cardwell

Consulting Agreement, Mr.

Cardwell will perform all duties typically required of a Chief Financial Officer.

As compensation for his services,

the Company shall pay Mr.

Cardwell One Thousand Five Hundred Dollars ($1,500) per month.

The Cardwell Consulting Agreement is for a term

Either party may terminate the agreement upon thirty (30) day written notice.

July 21, 2023, entered into an employment agreement with Drinda Benjamin as its Vice President of Marketing.

Under the terms of the agreement,

the Company agrees to pay base salary of $215,000 per annum and subject to annual increases or 3%.

The Company also granted 222,016 options

to purchase Common Stock at $1.36 per share which vests monthly over three years.

Drinda Benjamin is eligible to receive an annual bonus

of up to 15% of the base salary, to be paid in cash, as reasonably determined by the Compensation Committee.

There was no accrued bonus

Equity Awards at Fiscal Year-End Table

Option Awards

Number of securities underlying outstanding options (#) exercisable

Number of securities underlying outstanding options (#) unexercisable

Option exercise price ($)

Option expiration date

Mark Tapsak, PhD

Drinda Benjamin

Fees earned and paid in cash ($)

Fees earned and paid Stock awards ($)

Robert Fischell

Andrew Sycoff

pay each of our non-employee directors an annual retainer either in cash or stock, at the director’s election, for service on the

All retainers are payable in arrears in four equal quarterly installments.

The retainers paid to non-employee directors for service

on the Board is $70,000 per year in 2023 and there is no additional fee for committee service.

Beginning in 2024, compensation to Board

members increased to $100,000 and the Chairman increased to $120,000.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

information required for this Item is incorporated by reference from our Proxy Statement.

table below sets forth information regarding the beneficial ownership of our Common Stock by (i) our directors and named executive officers

(including persons who served as principal executive officer and principal financial officer during a portion of the fiscal year ended

December 31, 2023) and all the named executives and directors as a group and (ii) any other person or group that to our knowledge beneficially

owns more than five percent of our outstanding shares of Common Stock.

information contained in this table is as of March 4, 2024.

At that date, we had 26,756,369 shares of Common Stock outstanding.

person is deemed to be a beneficial owner of shares if he has the power to vote or dispose of the shares.

This power can be exclusive

or shared, direct or indirect.

In addition, a person is considered by SEC rules to beneficially own shares underlying options or warrants

that are presently exercisable or that will become exercisable within sixty (60) days.

Name of Beneficial Owner

Amount and Nature of Beneficial Ownership

Percent of Ownership

Named Executives and Directors

Drinda Benjamin

Robert Fischell

James Cardwell

Andrew Sycoff

James Thrower

All directors and Named Executive Officers as a group (11 persons)

Over 5% Shareholders

John A Ballentyne Rev Trust 08/01/2017

Alma Diversified Holdings LLC

Over 5% Shareholders

* Less than 1%.

61,680 options deemed vested within 60 days of March 4, 2024.

Ownership includes (i) 31,734 shares of Common Stock owned individually, (ii) 3,316 owned jointly by Dr.

Fischell and his wife;

3,197 Options deemed vested within 60 days of March 4, 2024.

Ownership includes (i) 101,950 shares of Common Stock owned individually and (ii) 273,060 Options deemed vested within 60 days of March

Ownership includes only 10,598 shares of Common Stock owned individually.

SDR Diversified Holdings, LLC, an entity owned by Leah Rapps,

the wife of Shimon Rapps, owns 1,009,354 shares of common stock.

Leah Rapps has voting control and investment power over SDR Diversified

Holdings, LLC.

Rapps also owns 10,598 shares in her personal name.

Rapps disclaims beneficial ownership in the shares and warrants

held by his wife and by SDR Diversified Holdings, LLC.

Ownership includes:

(i) 76,279 shares of common stock owned by Mr.

and (ii) 116,501 common stock owned by Andrew Garrett, Inc.

Sycoff has voting power and investment control over the shares of common stock held by Andrew Garrett, Inc.

Alma Diversified Holdings

LLC, an entity owned by Sharon Sycoff, the wife of Mr.

Sycoff owns 2,575,938 shares of common stock.

Sharon Sycoff has voting power and

investment control over the shares held by Alma Diversified Holdings LLC and Mr.

Sycoff disclaims beneficial ownership in the shares

held by Alma Diversified Holdings LLC.

Ownership includes:

(i) 50,000 shares of common stock owned by Tapsak Enterprises LLC (ii) 1,500 shares of common stock owned by Stephen

Tapsak, son of Mark Tapsak, and iii) 91,860 Options deemed vested within 60 days of March 4, 2024.

Tapsak Enterprises LLC is jointly

owned by Mark Tapsak and his wife, Karena Tapsak.

211,294 Options deemed vested within 60 days of March 4, 2024.

Ownership includes:

(i) 1,396 shares of common stock owned individually and (ii) 5,098,770 owned by John A.

Ballantyne Revocable Trust

The address of John A.

Ballantyne Rev Trust 08/01/2017 is 7410 Claire Drive South, Fargo ND 58104.

Ballantyne has

voting and investment control over the shares held by John A.

Ballantyne Rev Trust 08/01/2017.

Ownership includes 2,087,130 shares of common stock held by Sabby Volatility Warrant Master Fund, Ltd.

Hal Mintz has control over Sabby

Management LLC that has voting and control over the shares held by Sabby Volatility Warrant Master Fund, Ltd.

The address of Sabby Volatility

Warrant Master Fund, Ltd.

is c/o Ogier Fiduciary Services (Cayman) Limited 89 Nexus Way, Camana Bay, Grand Cayman KY1-9007 Cayman Islands.

Ownership includes 2,575,938 directly by Alma Diversified Holdings LLC.

The address of Alma Diversified Holdings LLC is 1294 Albany Post

Rd, Gardiner NY 12525.

Certain Relationships and Related Transactions, and Director Independence.

information required for this Item is incorporated by reference from our Proxy Statement.

February 13, 2024, the Company entered into an Exchange Agreement with Andrew Garrett Inc and affiliates (the “Holders”),

pursuant to which the Company and the Holders agreed to replace 4,381,953 warrants exercisable to common shares owned by the Holders

in exchange for 3,593,203 shares of Common Stock to be issued by the Company.

October 7, 2022, the Company announced that it has acquired certain intellectual property related to a long-term implantable continuous

blood glucose monitor (“CBGM”) from Paul V.

Goode, the Chief Executive Officer and that it intends to develop the technology

to address the growing Type 1 and insulin-dependent Type 2 diabetes market.

Tapsak, Officer was also providing services including the laboratory and consultants via Tapsak Enterprises, LLC to the Company.

the consultants have become employees of the Company, and the laboratory has been leased directly by the Company and Tapsak Enterprises

will have limited, or no related party transactions in 2024.

Cardwell, an officer and CFO is also the COO of CFO Squad LLC providing financial reporting services to the Company.

Board has evaluated each of its directors’ independence from the Company based on the definition of “independence”

established by Nasdaq and has determined that e ach of the current members of GlucoTrack’s

Board of Directors is independent directors.

The Board has further determined that each member of our Audit Committee, Compensation

Committee and Nominating and Corporate Governance Committee is “independent” under applicable Nasdaq rules.

Board has also determined that each member of our audit committee is “independent” for purposes the Exchange Act.

its evaluation of each director’s or nominee’s independence from the Company, the Board reviewed whether any transactions

or relationships currently exist or existed during the past year between each director or nominee and the Company and its subsidiaries,

affiliates, equity investors, or independent registered public accounting firm, and whether there were any transactions or relationships

between each director or nominee and members of the senior management of the Company or their affiliates.

Principal Accountant Fees and Services.

information required for this Item is incorporated by reference from our Proxy Statement.

Kanne served as the independent registered public accounting firm to audit our books and accounts for the fiscal years ended December

31, 2022 and 2023.

table below presents the aggregate fees billed for professional services rendered by Fahn Kanne for the year ended December 31, 2023

Audit-related fees

All other fees

the above table, “audit fees” are fees billed for services provided related to the audit of our annual financial statements,

quarterly reviews of our interim condensed financial statements, and services normally provided by Fahn Kanne in connection with regulatory

filings or engagements for those fiscal periods.

“Tax fees” consist of amounts billed by an associated entity of Fahn Kanne

for services in connection with the preparation of our federal and state tax returns.

Exhibits, Financial Statement Schedules.

financial statements of the Company filed herewith are set forth in Part II, Item 8 of this report.

Statement Schedules:

Merger Agreement and Plan of Reorganization, dated as of May 25, 2010, by and among Integrity Applications, Inc., Integrity Acquisition Ltd.

Integrity Applications Ltd.

Certificate of Incorporation of Integrity Applications, Inc.

of Incorporation of Integrity Applications, Inc.

Certificate of Amendment to Certificate of Incorporation of Integrity Applications, Inc.

Bylaws of Integrity Applications, Inc.

Certificate of Designation of Preferences and Rights of Series A 5% Convertible Preferred Stock (2)

Certificate of Designation of Preferences and Rights of Series B 5.5% Convertible Preferred Stock (3)

Certificate of Designation of Preferences and Rights of Series C 5.5% Convertible Preferred Stock (8)

Certificate of Amendment to Certificate of Incorporation of Integrity Applications, Inc.

Amendments to The Company’s Certificate of Incorporation **

4 unchanged sentences

Form of Series A Registration Rights Agreement (2)

Certificate of Designation of Preferences and Rights of Series A 5% Convertible Preferred Stock (2)

Form of Series B Securities Purchase Agreement (3)

2 unchanged sentences

Form of Series B Registration Rights Agreement (3)

Certificate of Designation of Preferences and Rights of Series B 5.5% Convertible Preferred Stock (3)

Form of Series C Securities Purchase Agreement (6)

2 unchanged sentences

Form of Series C Registration Rights Agreement (6)

Certificate of Designation of Preferences and Rights of Series C 5.5% Convertible Preferred Stock (6)

Form of Series D Securities Purchase Agreement (10)

3 unchanged sentences

Form of Series D Registration Rights Agreement (10)

Form of Prefunded Warrant (12)

Integrity Applications, Inc.

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Integrity Applications Ltd., Yitzhak Fisher, Asher Kugler and Nir Tarlovsky.

Personal Employment Agreement, dated as of October 22, 2013, between A.D.

Integrity Applications Ltd.

and Eran Hertz.

Personal Employment Agreement, dated as of February 1, 2017, between A.D.

Integrity Applications Ltd.

and Sami Sassoun (9)

Amended and Restated Consulting Agreement, dated as of February 6, 2017, between Integrity Applications, Inc.

and Strand Strategy (9)

Personal Employment Agreement, dated as of March 20, 2017, between Integrity Applications, Inc.

and John Graham (9)

First Amendment to Employment Agreement, effective as of April 7, 2017, between Integrity Applications, Inc.

and John Graham (11)

Employment Agreement, effective as of June 26, 2017, between Integrity Applications, Inc.

and David Podwalski (5)

Form of Underwriting Agreement, dated April 13, 2023, between GlucoTrack, Inc.

and Aegis Capital Corp.

Consulting Agreement, dated October 11, 2023, by and between GlucoTrack, Inc.

Cardwell (13)

Form of Exchange Agreement, dated February 13, 2024, by and among GlucoTrack, Inc.

and certain holders thereof (14)

Consulting Agreement, dated August 1, 2019, by and between Integrity Applications, Inc.

and Jolie Kahn (15)

Employment Agreement, dated October 19, 2021, by and between Integrity Applications, Inc.

Code of Ethics (7)

Insider Trading Policies and Procedures, adopted March 22, 2024.***

Subsidiaries of Integrity Applications, Inc.

Consent of Marcum LLP

Consent of Grant Thornton Israel

Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a) or 15(d)-14(a), as Adopted Pursuant to Section 302 of the Sarbanes Oxley Act of 2002 ***

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Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002 ***

Policy Related to Recovery of Erroneously Awarded Compensation, adopted November 30, 2023.***

XBRL Instance Document *

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1 to the Company’s Registration Statement on Form S-1, as filed with the SEC on October

filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2017, as filed with the SEC

on August 18, 2017.

filed as an exhibit to Amendment No.

3 to the Company’s Registration Statement on Form S-1, as filed with the SEC on November

Previously filed as an exhibit to the Company’s Current Report on Form 8-K, as filed with the SEC on April

filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with

the SEC on March 31, 2017.

Previously filed as an exhibit to the Company’s Registration Statement on Form S-1, as filed with the SEC

on November 7, 2017.

filed as an exhibit to the Company’s Current Report on Form 8-K, as filed with the SEC on April 15, 2017

filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with

filed as an exhibit to the Company’s Current Report on Form 8-K, as filed with

the SEC on March 7, 2018.

filed as an exhibit to the Company’s Registration Statement on Form S-1, as filed with the SEC on November 7, 2017.

filed as an exhibit to the Company’s Current Report on Form 8-K, as filed with the SEC on April 15, 2017

filed as an exhibit to the Company’s Current Report on Form 8-K, as filed with the SEC on March 23, 2016.

filed as an exhibit to the Company’s Current Report on Form 8-K, as filed with the SEC on April 17, 2023.

filed as an exhibit to the Company’s Current Report on Form 8-K, as filed with the SEC on October 12, 2023.

filed as an exhibit to the Company’s Current Report on Form 8-K, as filed with the SEC on February 16, 2024.

Previously filed as an exhibit to the Company’s Current Report on Form 8-K, as filed with the SEC on August

Previously filed as an exhibit to the Company’s Current Report on Form 8-K, as filed with the SEC on April

Previously filed as an exhibit to the Company’s Current Report on Form 8-K, as filed with the SEC on October

Plan or Arrangement or Management Contract.

Previously filed.

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

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Executive Officer (Principal Executive Officer)

James Cardwell

Financial Officer (Principal Financial Officer)

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registrant and in the capacities and on the dates indicated.

James Cardwell

Financial Officer

March 31, 2023

Executive and Financial Officer and Principal Accounting Officer)

Robert Fischell

March 31, 2023

Robert Fischell

March 31, 2023

Financial Statements

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Statements of Operations and Comprehensive Loss

Statements of Changes in Stockholders’ Equity (Deficit)

Statements of Changes in Stockholders’ Equity

Statements of Cash Flows

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(the “Company”) as of December 31, 2023 and

2021, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity and

cash flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial

2022, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity and cash flows

for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial

statements”).

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plans regarding these matters are also described in Note 1B.

The financial statements do not include any adjustments that might result

from the outcome of this uncertainty.

The consolidated financial statements do not include any adjustments that

might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

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provide a reasonable basis for our opinion.

accounting matters

audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be

communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that

was communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material

to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication

of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are

not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or

disclosures to which it relates.

described further in Note 1B, the Company has not yet generated significant revenues from its previous product and the development and

commercialization of its current product is expected to require substantial additional expenditures.

Thus, the Company is dependent upon

external sources for financing its operations.

As of December 31, 2023, the Company has incurred accumulated deficit of $109,853.

the Company has generated recurring operating losses and negative operating cash flow.

As of December 31, 2023, the remaining balance

of cash and cash equivalents was determined by the Company’s management as insufficient for the Company to realize its business

plans for the twelve-month period subsequent to the reporting period.

Accordingly, the Company’s management has determined that

these conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Company plans to finance its operations through the sale of equity and/or debt securities.

However, Company’s management has concluded

that such plans do not alleviate the substantial doubt regarding to the Company’s ability to continue as a going concern as it

was determined by management that there can be no assurance that the Company will succeed in obtaining the necessary financing or generating

sufficient revenues from sales of its current product in order to continue its operations as a going concern.

identified the assessment of the Company’s ability to continue as a going concern as a critical audit matter.

The principal considerations

for our determination are due to significant judgment required by management when assessing the Company’s ability to continue as

a going concern, taking into consideration management plans, the Company’s available funds, the ability of the Company to generate

revenues from sales of its current product and the risk of bias in management’s judgments and assumptions in their determination.

audit procedures related to this matter included the following, among others.

We reviewed and evaluated management’s plans for dealing

with the adverse effect of these conditions and events.

We inquired Company management and reviewed the company records to assess whether

there are additional factors that might contribute to the uncertainties disclosed.

We evaluated the reasonableness of significant assumptions

used by management in its determination.

We assessed whether the Company’s determination that there is substantial doubt about

its ability to continue as a going concern was adequately disclosed.

FAHN KANNE & CO.

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BALANCE SHEETS

thousand of US dollars

In thousands of US dollars

(except stock data)

and cash equivalents (Note 2H)

Current Assets

current assets

lease right-of-use assets, net

and equipment, net (Note 3)

cash (Note 2H)

AND STOCKHOLDERS’ EQUITY

lease liabilities, current

current liabilities (Note 4)

Cash and cash equivalents (Note 2D)

Other current assets

Total current assets

Property and equipment, net

Restricted cash (Note 2D)

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

from stockholders (Note 5)

lease liabilities, non-current

Accounts payable

Other current liabilities

Total current liabilities

Non-current Liabilities

and contingent liabilities (Note 6)

Stockholders’

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

shares authorized;

15,500,730 and 15,470,402 shares issued and outstanding as of December 31, 2022 and 2021, respectively

Stock of $ 0.001 par

value (“Common Stock”):

500,000,000 shares authorized;

15,500,730 and 15,470,402 shares issued and outstanding as of December 31, 2022 and 2021, respectively

paid-in capital

on account of shares

other comprehensive income (loss)

stockholders’ equity

LIABILITIES AND STOCKHOLDERS’ EQUITY

Loans from stockholders (Note 3)

Total liabilities

Commitments and contingent liabilities (Note 4)

Stockholders’ Equity (Note 5)

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

shares authorized as of December 31, 2023 and 2022;

and 15,500,730 shares issued and outstanding

as of December 31, 2023 and 2022, respectively

Stock of $ 0.001

par value (“Common Stock”):

500,000,000 shares authorized as of December 31, 2023 and 2022;

20,892,193 and 15,500,730

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

Additional paid-in capital

Receipts on account of shares

Accumulated other comprehensive income

Accumulated deficit

Total stockholders’ equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

accompanying notes are an integral part of these consolidated financial statements

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

In thousand of US dollars

In thousands of US dollars

(except stock and per stock amounts)

and development expenses (Note 8)

expenses (Note 9)

and administrative expenses (Note 10)

operating expenses

comprehensive loss (income):

currency translation adjustment

Comprehensive

Research and development expenses (Note 6)

Marketing expenses

General and administrative expenses (Note 7)

Total operating expenses

Operating loss

Other expense

Finance income, net

Loss for the year

per share (Basic and Diluted)

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

Other comprehensive loss (income):

Foreign currency translation adjustment

Comprehensive loss for the year

Basic and diluted loss per share (Note 2J)

Weighted average number of Common Stock outstanding used in computing basic and diluted net loss per share

accompanying notes are an integral part of the consolidated financial statements.

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Stockholders’

thousands of US Dollars (except share data)

In thousands of US Dollars (except share data)

Comprehensive

Stockholders’

as of January 1, 2021

comprehensive loss

of restricted shares as compensation towards directors

as of December 31, 2021

as of January 1, 2022

comprehensive income

of restricted shares as compensation towards directors

as of December 31, 2022

than 1 thousand.

Balance as of January 1, 2022

Loss for the year

Other comprehensive income

Stock-based compensation

Issuance of restricted shares as compensation towards directors

Balance as of December 31, 2022

Balance as of January 1, 2023

Loss for the year

Other comprehensive loss

Net proceeds received from underwritten U.S.

public offering

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

Stock-based compensation

Issuance of restricted shares as compensation towards directors

Balance as of December 31, 2023

accompanying notes are an integral part of the consolidated financial statements.

STATEMENTS OF CASH FLOWS

flows from operating activities:

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

loss from sale of property and equipment

of restricted shares as compensation to directors

difference on principal of loans from stockholders

in assets and liabilities:

in accounts receivable

Cash flows from operating activities:

Loss for the year

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

Capital loss from sale of property and equipment

Stock-based compensation

Issuance of restricted shares as compensation to directors

Linkage difference on principal of loans from stockholders

Changes in assets and liabilities:

Increase in other current assets

(Decrease) in accounts payable

(Decrease) in other current liabilities

cash used in operating activities

flows from investment activities:

from sale of property and equipment

of property and equipment

cash provided by (used in) investment activities

of exchange rate changes on cash and cash equivalents

in cash, cash equivalents, and restricted cash

cash equivalents, and restricted cash at beginning of the year

cash equivalents, and restricted cash at end of the year

Increase in accounts payable

Increase (Decrease) in other current liabilities

Net cash used in operating activities

Cash flows from investment activities:

Proceeds from sale of property and equipment

Purchase of property and equipment

Net cash provided by investment activities

Cash flows from financing activities

Net proceeds received from underwritten U.S.

public offering (Note 5B)

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Change in cash, cash equivalents, and restricted cash

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

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

accompanying notes are an integral part of the consolidated financial statements.

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The Company is a medical

device company, focuses on the design, development and commercialization of non-invasive glucose monitoring devices for use by people

with diabetes.

date, the Company developed indirectly through its wholly owned subsidiary, A.D.

Integrity Applications Ltd.

(the “Integrity

Israel”), a non-invasive glucose monitor, the GlucoTrack® glucose monitoring device, which is 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 1.0”) utilizes a combination of ultrasound, electromagnetic

and thermal technologies to obtain glucose measurements in less than 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.

the Company is developing directly its new generation (“GlucoTrack 2.0”) which utilizes substantially identical underlying

sensor technology and which is expected to be based on a completely wireless sensor to be clipped on the earlobe.

GlucoTrack 2.0

is designed to eliminate the handheld unit and is expected to transmit results directly to a user’s smartphone.

Company and Integrity Israel are considered collectively as the “Group”

connection with its application to list its shares on Nasdaq Capital Market (“NASDAQ”), as detailed below, 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 the then Shares, options and warrants to purchase Common Stock and loss per share amounts have been

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

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

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

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

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

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

device company, focuses on the design, development and commercialization of diabetes technology devices for use by people with diabetes.

October 07, 2022, the Company entered into an agreement with its Chief Executive Officer under which intellectual property was purchased

to be used for newly acquired continuous glucose monitoring (CGM) technology which is a multi-year implantable CGM targeting Type 1 patients

and Type 2 patients on insulin therapy.

The technology is in a feasibility assessment phase using bech testing and simulated data.

success, the project will migrate into development of a prototype implantable system for evaluation in animal studies.

The goal of the

implantable CGM technology is to provide a minimum of two years of CGM data without requiring the patient to have a wearable device,

unlike current technology available in the market ( see also note 6C).

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 in stockholders’ equity.

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

securities or net income from continuing operations.

Thus, the Company no longer complies with the Rule for continued listing.

Company has a 45-day period ending on January 6, 2023 to submit a plan of compliance to Nasdaq, and the Company’s plan was

accepted, and the Company must regain compliance by May 22, 2023.

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

1 – GENERAL (cont.)

to be used for newly acquired continuous glucose monitoring (“CGM”) technology which is a multi-year implantable CGM targeting Type

1 patients and Type 2 patients on insulin therapy.

The technology is in a feasibility assessment phase using bench testing and simulated

Upon success, the project will migrate into development of a prototype implantable system for evaluation in animal studies.

The goal of the implantable CGM technology is to provide a minimum of two years of CGM data without requiring the patient to have

a wearable device, unlike current technology available in the market (see also Note 4B below).

On November 13, 2023, the Company shifted its strategic focus from

non-invasive point-in-time glucose monitoring to CGM technology.

Company and Integrity Israel are considered collectively as the “Company.”

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.

date, the Company had not yet commercialized the Glucotrack CBGM product.

Further development and commercialization efforts are expected

to require substantial additional expenditures.

Therefore, the Company is dependent upon external sources for financing its operations.

As of December 31, 2023, the Company has incurred accumulated deficit of $ 109,853 .

thousand, and negative operating cash flows.

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

As of December 31, 2022, the balance of cash and cash equivalents amounted to $ 2,312 is insufficient for the Company to realize its

business plans for the twelve-month period subsequent to the reporting period.

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.

Furthermore, the Company has generated operating

losses and negative operating cash flow for all reported periods.

As of December 31, 2023, the balance of cash and cash equivalents

amounted to $ 4,492 is insufficient for the Company to realize its business plans for the twelve-month period subsequent to the reporting

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 raise substantial doubt about the Company’s ability to continue as a going

the year ended December 31, 2023, the Company raised net proceeds of $ 8,730 through completion of underwritten public offering (see

also Note 5B).

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

sales of its GlucoTrack 2.0 product in order to continue its operations as a going concern.

Company to register up to $ 90,000 of certain equity and/or debt securities of the Company through prospectus supplement).

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

its GlucoTrack CBGM product in order to continue its operations as a going concern.

consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

of the spread of the Coronavirus on the Company

the year ended December 31, 2022, there were no material adverse impacts on the consolidated financial statements.

The duration,

scope and effects of the ongoing COVID-19 pandemic, government and other third-party responses to it, the related macroeconomic effects,

and the extent of its impact on the Company’s operational and financial performance will depend on future developments.

events continue to evolve and additional information becomes available, the Company’s estimates and assumptions may change

in future periods.

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States

of America (US GAAP).

consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America

of estimates in the preparation of financial statements

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Actual results could differ from those

As applicable to these financial statements, the most significant estimates and assumptions relate to evaluation of going concern.

Management believes that there are no critical accounting estimates in

these financial statements.

functional currency of the Company is the US dollar, which is the currency of the primary economic environment in which it operates.

8 unchanged sentences

Accordingly, assets and liabilities were translated from NIS to US dollars

using year-end exchange rates, and income and expense items were translated at average exchange rates during the year.

Gains or losses

resulting from translation adjustments are reflected in stockholders’ equity, under “accumulated other comprehensive

income (loss)”.

using year-end exchange rates, and expense items were translated at average exchange rates during the year.

Gains or losses resulting

from translation adjustments are reflected in stockholders’ equity, under “accumulated other comprehensive income”.

OF OFFICIAL EXCHANGE RATE

exchange rate of NIS 1 to US dollar

Official exchange rate of NIS 1 to US dollar

Decrease of the official exchange rate of NIS 1 to US dollar during the year:

3 unchanged sentences

have been eliminated in consolidation.

and cash equivalents

Group considers all short-term investments, which are highly liquid investments with original maturities of three months or less

at the date of purchase, to be cash equivalents.

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Combinations and Assets Acquisitions

the Company acquires net assets that do not constitute a business, as defined under ASU 2017-01 Business Combinations (Topic 805)

Clarifying the Definition of a Business (such when there is no substantive process in the acquired entity), no goodwill is recognized

and acquired In-Process Research and Development intangible asset (“IPR&D”) to be used in research and development

projects which have been determined not to have alternative future use, is expensed immediately.

Contingent consideration related

to asset acquisition that will be paid subject to the achievement of performance milestones, which are outside the control of the

Company, is recognized when the contingency is resolved or when it is considered as probable and reasonably estimable under ASC 450,

Contingencies.

During the reported periods, the Company was not involved in any Business Combinations transaction (see also Note

and cash equivalents and restricted cash

Company considers all short-term investments, which are highly liquid investments with original

maturities of three months or less at the date of purchase, to be cash equivalents.

cash is invested in certificates of deposit, which are used to secure Integrity Israel’s obligations in respect of its credit

presentation of statement of cash flows purposes, restrict cash balances are included with cash and cash equivalents, when reconciling

the reported period total amounts.

OF RESTRICT CASH BALANCES ARE INCLUDED WITH CASH AND CASH EQUIVALENTS

In thousands of US dollars

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents, and restricted cash shown in the statement of cash flows

and equipment, net

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depreciation are removed from the respective accounts and the net difference less any amount realized from disposition is reflected

in the statements of operations.

in the statements of operations and comprehensive loss.

of depreciation:

OF PROPERTY AND EQUIPMENT, RATES OF DEPRECIATION

and office equipment

Furniture and office equipment

of long-lived assets

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losses related to long lived assets.

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

and Cash Equivalents and Restricted cash

cash is invested in certificates of deposit, which are used to secure Integrity Israel’s

obligations in respect of its headquarters lease and credit card (See also Note 6C).

presentation of statement of cash flows purposes, restrict cash balances are included with cash and cash equivalents, when reconciling

the reported period total amounts.

OF RESTRICT CASH BALANCES ARE INCLUDED WITH CASH AND CASH EQUIVALENTS

thousand of US dollars

and cash equivalents

cash, cash equivalents, and restricted cash shown in the statement of cash flows

Group accounts for income taxes in accordance with ASC 740, “Income Taxes”.

Accordingly, deferred income taxes are determined

utilizing the asset and liability method based on the estimated future tax effects of differences between the financial accounting

and the tax bases of assets and liabilities under the applicable tax law.

Deferred tax balances are computed using the enacted tax

rates expected to be in effect when these differences reverse.

Valuation allowances in respect of deferred tax assets are provided

for, if necessary, to reduce deferred tax assets to amounts more likely than not to be realized.

Group accounts for uncertain tax positions in accordance with ASC Topic 740-10, which prescribes detailed guidance for the financial

Company accounts for income taxes in accordance with ASC 740, “Income Taxes”.

Accordingly, deferred income taxes are

determined utilizing the asset and liability method based on the estimated future tax effects of differences between the financial

accounting and the tax bases of assets and liabilities under the applicable tax law.

Deferred tax balances are computed using the

enacted tax rates expected to be in effect when these differences reverse.

Valuation allowances in respect of deferred tax assets

are provided for, if necessary, to reduce deferred tax assets to amounts more likely than not to be realized.

Company accounts for uncertain tax positions in accordance with ASC Topic 740-10, which prescribes detailed guidance for the financial

statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements.

According to ASC Topic 740-10, tax positions must meet a more-likely-than-not recognition threshold.

The Group’s accounting

policy is to classify interest and penalties relating to uncertain tax positions under income taxes, however the Group did not recognize

such items in its fiscal 2022 and 2021 financial statements and did not recognize any liability with respect to unrecognized tax

position in its balance sheet.

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

for employee rights upon retirement

Israel’s liability for employee rights upon retirement with respect to its Israeli employees was calculated pursuant

to the Israeli Severance Pay Law, based on the most recent salary of each employee multiplied by the number of years of employment

of each such employee as of the balance sheet date.

Employees were entitled to one month’s salary for each year of employment,

or ratable portion thereof for periods less than one year.

Integrity Israel made monthly deposits to insurance policies and severance

deposited funds were withdrawn upon the fulfillment of Integrity Israel’s severance obligations pursuant to Israeli severance

pay laws or labor agreements with its employees.

The value of the deposited funds was based on the cash surrender value of these

policies, and includes immaterial profits or losses.

in 2011, Integrity Israel’s agreements with its Israeli employees are in accordance with Section 14 of the Severance Pay Law.

Payments in accordance with Section 14 release the employer from any future severance payments in respect of those employees.

obligations and liabilities under Section 14 are not recorded as an asset or as a liability in the Company’s balance sheet.

the year ended December 31, 2022, and 2021, severance expenses have been recorded in total amount of $ 27 and $ 43 thousand, respectively.

The Company’s accounting

policy is to classify interest and penalties relating to uncertain tax positions under income taxes, however the Company did not

recognize such items in its fiscal 2023 and 2022 financial statements and did not recognize any liability with respect to unrecognized

tax position in its balance sheet.

and development expenses

and development expenses are charged to operations as incurred.

and development expenses are charged to operations and comprehensive loss, as incurred.

Royalty-bearing

2 unchanged sentences

Integrity Israel is entitled to such grants, on the basis of the costs incurred and reduce research and development costs.

the cumulative research and development grants received by Integrity Israel from IIA amounted to $ 93 thousand.

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

the cumulative research and development grants received by Integrity Israel from IIA amounted to $ 93 .

See also Note 2K above.

of equity-classified contracts

9 unchanged sentences

to earnings available to common shareholders for purposes of calculating earnings per share.

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Company applies ASC Update 2016-02, Leases (Topic 842) under which the Company determines if an arrangement is a lease at inception.

Under Topic 842, arrangements meeting the definition of a lease are classified as operating or financing leases.

A classification

of a lease is determined based on the following criteria:

lease transfers ownership of the underlying asset to the lessee by the end of the lease term.

lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise.

lease term is for the major part of the remaining economic life of the underlying asset ( Generally, 75% or more of the remaining

economic life of the underlying assets ).

present value of the sum of the lease payments and any residual value guaranteed by the lessee equals or exceeds substantially all

of the fair value of the underlying asset ( Generally, 90% or more of the fair value of the underlying asset ).

underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease

any of the above criteria are met, the lease is classified as a finance lease.

Otherwise, the lease is classified as an operating lease.

are recorded on the consolidated balance sheet as both a right of use asset and a lease liability, calculated by discounting fixed lease

payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate.

Lease liabilities are

increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term.

For operating

leases, interest on the lease liability and the amortization of the right of use asset results in straight-line rent expense over the

Variable lease expenses, if any, are recorded when incurred.

Company also elected the short-term lease recognition exemption for all leases that qualify (leases with a term shorter than 12 months).

For those leases, right-of-use assets or lease liabilities are not recognized and rent expense is recognized on a straight-line basis

over the lease term.

2022, the Company terminated its lease agreement for vehicles, as the senior employees in Israel has resigned from the Company, and respectively

have returned the vehicles to the lease dealership.

As of December 31, 2022, the Company is subject to several non-cancelable lease agreements

for workspaces for use in its operations, which are classified as operating leases.

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

3 – PROPERTY AND EQUIPMENT, NET

OF PROPERTY AND EQUIPMENT, NET

and Equipment

thousand of US dollars

and office equipment

Property and equipment, gross

– accumulated depreciation

Property and equipment,

the years ended December 31, 2022 and 2021, depreciation expenses have been recorded in total amount of $ 23 and $ 42 thousand, respectively.

4 – OTHER CURRENT LIABILITIES

OF OTHER CURRENT LIABILITIES

Current Liabilities

thousand of US dollars

and related institutions

expenses and others

other current liabilities

issued accounting pronouncements, not yet adopted

In November 2023, the Financial Standards Accounting Board (FASB) issued Accounting Standards Update (ASU) 2023-07 “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures”, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for the Company’s annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted.

The Company is currently evaluating the potential effect that the updated standard will have on the consolidated financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topics 740):

Improvements to Income Tax Disclosures” to expand the disclosure requirements for income taxes, specifically relating to the rate reconciliation and income taxes paid.

ASU 2023-09 is effective for the Company’s annual periods beginning January 1, 2025, with early adoption permitted.

The Company is currently evaluating the potential effect that the updated standard will have on the consolidated financial statement disclosures.

3 – LOANS FROM STOCKHOLDERS

the years 2003-2004, Integrity Israel received loans from stockholders (four separate lenders) in a total amount of approximately

$ 400 thousand.

However, following the repayment of the entire balance to certain lender in 2015, the remaining balance as of December 31,

31,2022 is approximately $ 195 thousand.

The loans are indexed to the Israeli consumer price index from their origination date and

bear no interest.

Group will be required to pay the loans, in quarterly installments, commencing on the first quarter following the first fiscal year

in which the Group reports net profit in its annual report.

At such time, the Group will be required to make quarterly payments equal

to 10 % of its total sales for each quarter until the loans have been repaid in full.

Notwithstanding the repayment mechanism, the

Group will not be required to repay the loans during any period in which such payment would cause a deficit in the Group’s

2022 is approximately $ 196 .

The loans are indexed to the Israeli consumer price index from their origination date and bear no interest.

Company will be required to pay the loans, in quarterly installments, commencing on the first quarter following the first fiscal

year in which the Company reports net profit in its annual report.

At such time, the Company will be required to make quarterly payments

equal to 10 % of its total sales for each quarter until the loans have been repaid in full.

Notwithstanding the repayment mechanism,

the Company will not be required to repay the loans during any period in which such payment would cause a deficit in the Company’s

working capital.

of December 31, 2022, the Group does not expect to make any material repayments during the following 12-month period, if any, and

of December 31, 2023, the Company does not expect to make any material repayments during the following 12-month period, if any, and

accordingly the entire remaining balance of the loans from stockholders have been presented as non-current liability.

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

4 – COMMITMENTS AND CONTINGENT LIABILITIES

March 4, 2004, the Israel innovation authority (IIA) provided Integrity Israel with a grant of approximately $ 93 thousand (NIS 420

thousand), for its plan to develop a non-invasive blood glucose monitor (the “Development Plan”).

Integrity Israel is

required to pay royalties to the IIA at a rate ranging between 3 - 5 % of the proceeds from the sale of the Group’s products arising

from the Development Plan up to an amount equal to $ 93 thousand, plus interest at LIBOR from the date of grant.

As of December 31,

2022, the remaining contingent liability with respect to royalty payment on future sales equals approximately $ 80 thousand.

contingent obligation has no expiration date.

of December 31, 2022, the Group accrued royalties to the IIA in insignificant amounts.

March 2021 Integrity Israel is renting several workspaces at office building in the city Or – Yehoda.

According to the lease

agreement, Integrity Israel renting those flexible shared workspaces for period shorter than one year.

March 4, 2004, the IIA provided Integrity Israel with a grant of approximately $ 93 (NIS 420 ), for its plan to develop a non-invasive

blood glucose monitor (the “Development Plan”).

Integrity Israel is required to pay royalties to the IIA at a rate ranging

between 3 - 5 % of the proceeds from the sale of the Company’s products arising from the Development Plan up to an amount equal

to $ 93 , plus interest at LIBOR from the date of grant.

As to the replacement of the LIBOR benchmark rate, even though the IIA has

not declared the alternative benchmark rate to replace the LIBOR, the Company does not believe it will have a significant impact.

As of December 31, 2023, the remaining contingent liability with respect to royalty payment on future sales equals approximately

$ 73 , excluding interest.

Such contingent obligation has no expiration date.

October 7, 2022 (“the Closing Date”), the Company entered into Intellectual Property Purchase Agreement (the “Agreement”)

6 unchanged sentences

Intellectual Property”);

of the goodwill relating to the Purchased Assets.

consideration for the sale by Seller of the Purchased Assets to the Company, at the Closing Date, the Company paid to Seller cash in

the amount of one dollar and up to 1,000,000 shares of its common stock to be issued based upon the performance milestones as set forth

in the Agreement (the “Purchase Price”).

In addition, if upon the final issuance, the aggregate 1,000,000 shares represent

less than 1.5 % of the then outstanding shares of the Company, the final issuance will include such number of additional shares so that

the total aggregate issuance equals 1.5 % of the outstanding shares (the “True-Up Shares”).

All shares of Company common stock

that will be issued under this agreement shall be (i) restricted and issued in transactions exempt from registration under Section 4(a)(2)

of the Securities Act of 1933, as amended and (ii) subject to the lockup provisions.

the Company acquires net assets that do not constitute a business, as defined under ASU 2017-01 Business Combinations (Topic 805) Clarifying

the Definition of a Business (such when there is no substantive process in the acquired entity) the transaction is accounted for as asset

acquisition and no goodwill is recognized.

the goodwill relating to the Purchased Assets.

consideration for the sale by Seller of the Purchased Assets to the Company, at the Closing

Date, the Company paid to Seller cash in the amount of one dollar and obligated to issue

up to 1,000,000 Common Stock to be issued based upon specified performance milestones as

set forth in the Agreement (the “Purchase Price”).

In addition, if upon the final

issuance, the aggregate 1,000,000 shares represent less than 1.5 % of the then outstanding

Common Stock of the Company, the final issuance will include such number of additional shares

so that the total aggregate issuance equals 1.5 % of the outstanding shares (the “True-Up

All shares of Common Stock of the company that will be issued under this

agreement shall be (i) restricted over a limited period of 1-year and issued in transactions

exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended

and (ii) subject to the lockup provisions.

the Company acquires net assets that do not constitute a business, as defined under ASU 2017-01 Business Combinations (Topic 805)

Clarifying the Definition of a Business (such when there is no substantive process in the acquired entity) the transaction is accounted

for as asset acquisition and no goodwill is recognized.

The acquired In-Process Research and Development intangible asset (“IPR&D”)

1 unchanged sentence

the Closing Date, it was determined that the asset acquisition represent the purchase of IPR&D with no alternative future use.

the achievement of each of the performance milestones is considered as contingent event outside the Company’s control and thus

the contingent consideration which is equal to the Purchase Price as measured at the Closing Date will be recognized when it becomes

probable that each target will be achieved within the reasonable period of time.

Such additional contingent consideration will be recognized

in subsequent periods if and when the contingency (the achievement of targets) is resolved, or when it will be considered as reasonably

estimable under ASC 450, Contingencies.

the period commencing the Closing Date and through December 31, 2022, the Company did not record any amount related to the contingent

consideration, relating to any of the aforesaid performance milestones.

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

However, the achievement of each of the performance milestones is considered as contingent event outside the Company’s control

and thus the contingent consideration which is equal to the fair value of the Purchase Price as measured at the Closing Date will

be recognized when it becomes probable that each target will be achieved within the reasonable period of time.

Such additional contingent

consideration will be recognized in subsequent periods if and when the contingency (the achievement of targets) is resolved, or when

it will be considered as reasonably estimable under ASC 450, Contingencies.

the middle of June 2023, the Company achieved the first performance milestone out of the five performance milestones outlined in the

Agreement executed between the Company and the Seller as of the Closing Date.

As a result, upon the date of fulfillment of the

performance first milestone the Company was committed to issue 100,000

restricted shares to the Seller (such shares have been issued on February 6, 2024).

During the year ended December 31, 2023, the

Company recorded stock-based compensation expenses of $ 131

(as part of research and development expenses), which represents the quoted price of its Common Stock at the Closing Date, after

taking into consideration a discount for lack of marketability at a rate of 30.4 %

over a restriction period of 1-year.

As of December 31, 2023, achievement of all other performance milestones was not considered

probable and thus stock-based compensation expenses were not recorded with respect to thereof.

5 – COMMON STOCK AND WARRANTS WITH-DOWN ROUND PROTECTION

3 unchanged sentences

The holders of Common Stock are not permitted to vote their shares cumulatively.

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 million 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

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 1,976,470 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.

incremental and direct issuance costs amounted to $ 1,270

These expenses were deducted from additional

paid-in capital as they were allocated to shares of Common Stock and pre-funded warrants.

On January 3, 2024, the above pre-funded warrants have been fully exercised

to 1,976,470 shares of Common Stock of the Company.

January 11, 2010, the Company’s Board of Directors approved and adopted the 2010 Share Incentive Plan (the “Plan”),

pursuant to which the Company’s Board of Directors may award share options to purchase the Company’s Ordinary Shares

as well as restricted shares, restricted stock units (the “RSU”) and other share-based awards to designated participants.

pursuant to which the Company’s Board of Directors may award share options to purchase the Company’s Common Stock as

well as restricted shares, Restricted Stock Units (the “RSU”) and other share-based awards to designated participants.

Subject to the terms and conditions of the Plan, the Company’s Board of Directors has full authority in its discretion, from

14 unchanged sentences

of equity awards to employees

February 8, 2021, The Company granted Mr.

Erez Ben-Zvi, the then Vice President of Product

of the Company, annual award with fair value of NIS 210 thousand (approximately $ 65 thousand)

of RSU effective as of the employee start date and on each one-year anniversary following

the employee start date subject to the approval of the board of directors (the “Additional

Both, the RSU and each of the Additional RSU (if approved by the board of directors),

as applicable, shall be based on the stock price at actual the date of grant (and not lower

than US$ 5.20 per share).

1/12 of the RSUs shall vest and become nonforfeitable three months

following the Start Date, and an additional 1/12 of the RSUs shall vest and become nonforfeitable

at the end of every 3-months period thereafter, provided that the employee continues to be

employed by the Company at the applicable date of vesting .

The vesting schedule shall be

also applied to each of the Additional RSUs granted, mutatis mutandis, such that the vesting

period of each of the respective Additional RSU shall commence from its actual date of grant.

June 2022, Erez Ben-Zvi resigned from the Company.

Thus, his stock-based compensation was terminated in the last vesting date of

the years ended December 31, 2022 and 2021, the Company recorded stock-based compensation expenses (income) of $( 25 ) thousand and

$ 76 thousand, respectively, with respect to the above grant.

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

7 – COMMON STOCK AND WARRANTS WITH-DOWN ROUND PROTECTION (cont.)

compensation (cont.)

of equity awards to employees (cont.)

November 2020, the Company granted Mr.

Shalom Shushan, the then Chief Technology Officer

of the Company, annual award with fair value of NIS 90 thousand (approximately $ 28 thousand)

of RSU effective as of the employee start date.

Furthermore, on each one-year anniversary

following the employee start date subject to the approval of the board of directors, Company

shall grant the Employee with fair value of NIS 60 thousand of Additional RSU (the “Additional

Both, the RSU and each of the Additional RSU (if approved by the board of directors),

as applicable, shall be based on the stock price at actual the date of grant (and not lower

than US$ 5.20 per share).

1/12 of the RSUs shall vest and become nonforfeitable three months

following the Start Date, and an additional 1/12 of the RSUs shall vest and become nonforfeitable

at the end of every 3-months period thereafter, provided that the Employee continues to be

employed by the Company at the applicable date of vesting .

The vesting schedule shall be

also applied to each of the Additional RSUs granted to the Employee, mutatis mutandis, such

that the vesting period of each of the respective Additional RSU shall commence from its

actual date of grant.

May 2022, Shalom Shushan resigned from the Company.

Thus, his stock-based compensation was terminated in the last vesting date of

the years ended December 31, 2022 and 2021, the Company recorded stock-based compensation expenses (income) of $( 6 ) thousand and

$ 22 thousand, respectively, with respect to the above grant.

In November 2021, the Company granted Mr.

Goode, the President and Chief Executive Officer of the Company, options with the fair value of $ 484 thousand, to purchase up to 1.5 % of the fully diluted common stock, par value $ 0.001 per share of the Company (approximately 328 thousand options), as of the grant date, with a per share exercise price equal to the greater of (A) $ 5.20 per share or (B) the closing price of a share of Common Stock on the grant date, as reported by Bloomberg L.P., which shall vest in equal monthly installments over a three year period following the grant date.

May 2022, the Company grated Mr.

Goode, a one-time grant of restricted stock of 18,000 shares (“RSU”), which be vest during one year, as long as he is employed

by the Company.

the years ended December 31, 2022 and 2021, the Company recorded stock-based compensation expenses of $ 306 thousand and $ 98 thousand,

respectively, with respect to the above grant.

December 2021, the Company granted Mr.

Thrower, the Vice President Engineering of

the Company, options with the fair value of $ 152 thousand, to purchase up to 1.15 % of the

fully diluted common stock, par value $ 0.001 per share of the Company (approximately 262

thousand options), as of the grant date, with a per share exercise price equal to the greater

of (A) $ 5.20 per share or (B) the closing price of a share of Common Stock on the grant date,

as reported by Bloomberg L.P., which shall vest in equal monthly installments over a three

year period following the grant date.

the years ended December 31, 2022 and 2021, the Company recorded stock-based compensation expenses of $ 93 thousand and $ 16 thousand,

respectively, with respect to the above grant.

October 2022, the Company granted Mr.

Mark Tapsak, the Vice President, Sensor Science of

the Company, options with the fair value of $ 22 thousand, to purchase up to 0.75 % of the

fully diluted common stock, par value $ 0.001 per share of the Company (approximately 116

thousand options), as of the grant date, with a per share exercise price equal to the greater

of (A) $ 5.20 per share or (B) the closing price of a share of Common Stock on the grant date,

as reported by Bloomberg L.P., which shall vest in equal monthly installments over a three

year period following the grant date.

the year ended December 31, 2022, the Company recorded stock-based compensation expenses of $ 5 thousand with respect to the above

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

7 – COMMON STOCK AND WARRANTS WITH-DOWN ROUND PROTECTION (cont.)

following table presents the Company’s share option activity for employees and members of the Board of Directors of the Company

under the Plan, for the years ended December 31, 2022 and 2021:

Mark Tapsak, the Vice President, Sensor Science of the Company, 115,857 options estimated at

fair value of $ 22 , to purchase the same number of Common Stock, with an exercise price per share equals to the greater of (A) $ 5.2

per share or (B) the closing price of a share of Common Stock on the grant date, as reported by Bloomberg L.P., which shall vest

in equal monthly installments over a period of 3 -years following the grant date.

August 2023, the Company granted Mrs.

Drinda Benjamin, the Vice President, Marketing of the Company, 222,016 options estimated at

fair value of $ 51 , to purchase the same number of Common Stock, with an exercise price per share equals to the greater of (A) $ 1.36

per share or (B) the closing price of a share of Common Stock on the grant date, as reported by Bloomberg L.P., which shall vest

in equal monthly installments over a period of 3 -years following the grant date.

the years ended December 31, 2023 and 2022, the Company recorded stock-based compensation expenses of $ 281 and $ 439 , respectively.

following table presents the Company’s stock options (excluding RSU) activity for employees and members of the Board of Directors

of the Company under the Plan, for the years ended December 31, 2023 and 2022:

OF SHARE OPTION ACTIVITY FOR EMPLOYEES AND MEMBERS

as of December 31, 2020

as of December 31, 2021

Share Options

Exercise Price

Outstanding as of December 31, 2021

Outstanding as of December 31, 2022

Exercisable as of December 31, 2022

as of December 31, 2022

7 unchanged sentences

value of the Company’s Ordinary Share.

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

7 – COMMON STOCK AND WARRANTS WITH-DOWN ROUND PROTECTION (cont.)

outstanding and exercisable share options as of December 31, 2022 have been separated into ranges of exercise prices, as follows:

OF OUTSTANDING AND EXERCISABLE SHARE OPTIONS

the years ended December 31, 2022 and 2021, share options have not been exercised into Ordinary Shares.

the years ended December 31, 2023 and 2022, stock options have not been exercised into Common Stock.

following table presents the assumptions used to estimate the fair values of the share options granted in the reported periods presented:

OF ASSUMPTIONS USED TO VALUE OPTIONS

interest rate (%)

Volatility (%)

Risk-free interest rate (%)

Dividend yield (%)

Expected life (years)

Exercise price ($)

Share price ($)

of December 31, 2022, there was $ 186 thousand of unrecognized compensation expense related to unvested share options.

recognizes compensation expense on a straight-line basis over the requisite service periods, which results in a weighted average

period of approximately 0.72 years over which the unrecognized compensation expense is expected to be recognized.

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

7 – COMMON STOCK AND WARRANTS WITH-DOWN ROUND PROTECTION (cont.)

of December 31, 2023, there was $ 83 of unrecognized compensation expense related to unvested stock options.

The Company recognizes

compensation expense on an accelerated vesting basis over the requisite service periods, which results in a weighted average period

of approximately 1.9 years over which the unrecognized compensation expense is expected to be recognized.

of equity awards to non-employees

connection with the 2017 Offering, the Company has issued to Andrew Garrett Inc, who served

as a placement agent in fundraising transaction (a) 5 -year warrants to purchase up to 1,062,717

shares of Common Stock at an exercise price of $ 3.354 per share, (b) 5 -year warrants to purchase

up to 108,305 shares of Common Stock at an exercise price of $ 23.40 per share, (c) 5 -year

warrants to purchase up to 8,331 shares of Common Stock at an exercise price of $ 46.80 per

share and (d) 5 -year warrants to purchase up to 8,331 shares of Common Stock at an exercise

price of $ 70.20 per share .

connection with February 2020 Offering, the Company has issued to the Andrew Garrett Inc, who served as a placement agent a 5 -year

connection with 2017 Offering, the Company has issued to Andrew Garrett Inc, who served as

a placement agent in fundraising transaction (a) 5 -years warrants to purchase up to 4,068,498

shares of Common Stock at an exercise price of $ 3.35 per share, (b) 5 -years warrants to purchase

up to 8,331 shares of Common Stock at an exercise price of $ 23.4 per share, (c) 5 -years warrants

to purchase up to 8,331 shares of Common Stock at an exercise price of $ 46.8 per share and

(d) 5 -years warrants to purchase up to 8,331 shares of Common Stock at an exercise price

of $ 70.2 per share .

connection with February 2020 Offering, the Company has issued to the Andrew Garrett Inc, who served as a placement agent a 5 -years

warrants to purchase up to 288,462 shares of Common Stock at an exercise price of $ 5.2 per share.

August 2020, advisory agreement was made between the Company and Malcolm McGuire & Assoc.

LLC, under which the advisor is providing strategic advisory services, which include, inter

alia, interface with the investment community on behalf of the Company, build a database

of appropriate brokers and investors, design and implement a plan for both the short and

the long-term encouragement of investor interest in the Company and create a compelling perception

of the Company within the investment community.

consideration was set as a monthly fee of $ 4 thousand cash and a monthly grant of non-qualified three-year options to purchase 461

shares of the Company’s Common Stock, at an exercise price equal to $ 6.5 .

the years ended December 31, 2022 and 2021, the Company recorded stock-based compensation expenses of $ 9 thousand and $ 13 thousand,

respectively, with respect to the above grant.

September 12, 2022, the Company signed on Advisory agreement with Andrew Garrett Inc, under which the Company agreed to extend the

3 unchanged sentences

Accordingly, additional compensation of

$ 56 thousand was calculated as the fair value of the modified award in excess of the fair value of the original award measured immediately

before its terms have been modified based on current circumstances and recorded this incremental fair value as an immediate expense

in 2022 as the warrants were fully vested at the modification date (See also note 13A).

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

7 – COMMON STOCK AND WARRANTS WITH-DOWN ROUND PROTECTION (cont.)

outstanding and exercisable share options as of December 31, 2022 have been separated into ranges of exercise prices, as follows:

OF OUTSTANDING AND EXERCISABLE SHARE OPTIONS

$ 56 was calculated as the fair value of the modified award in excess of the fair value of the original award measured immediately

before its terms have been modified.

The incremental fair value was recognized as an immediate expense in 2022 as the warrants were

fully vested at the modification date.

closing of underwritten U.S.

public offering as noted in Note 5B above, a down round protection feature of all the above warrants,

was triggered through the reduction of their original exercise prices from a price in a range of $ 3.35 -$ 70.2 to a price of $ 1.36

which represented the public offering price.

Such reduction was accounted for in accordance with the provisions of ASU 2017-11as

a deemed dividend estimated at a 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 2K above.

more information regarding the exchange of the above warrants to share of the Company’s Common Stock, see also Note 10A below.

total compensation cost related to all of the Company’s equity-based awards recognized during the years ended December 31,

1 unchanged sentence

OF TOTAL COMPENSATION COST EQUITY BASED AWARDS

and Development

thousand of US dollars

and Development

and development

and administrative

Research and Development

In thousands of US dollars

Research and development

General and administrative

Total compensation cost

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

6 – RESEARCH AND DEVELOPMENT EXPENSES

OF RESEARCH AND DEVELOPMENT EXPENSES

and Development

thousand of US dollars

and Development

and related expenses

due to slow inventory write-off

Research and Development

In thousands of US dollars

Research and Development

Salaries and related expenses

Professional fees

Vehicle maintenance

Research and Development Expense

9 – MARKETING EXPENSES

OF MARKETING EXPENSE

and Marketing

and related expenses

selling and marketing expense

7 – GENERAL AND ADMINISTRATIVE EXPENSES

OF GENERAL AND ADMINISTRATIVE EXPENSES

thousand of US dollars

and Administrative

and related expenses

General and Administrative

In thousands of US dollars

General and Administrative

Salaries and related expenses

Professional fees (including directors’ fee)

Vehicle maintenance

general and administrative expenses

8 unchanged sentences

filed with the tax authority up to and including 2018 are considered final.

for the year consists of the following:

for the years ended December 31, 2023 and 2022 consists of the following:

OF INCOME TAX LOSS FOR THE YEAR

entity (Integrity Israel)

Foreign entity (Integrity Israel)

loss for the year

operating losses carryforward

Operating Losses (NOL) carryforward

of December 31, 2023, the Company had cumulative Net Operating Losses (NOL) carry forward for US federal purposes of approximately

5 unchanged sentences

of the realization of such deferred taxes.

TO CONSOLIDATED FINANCIAL STATEMENTS (cont.)

11 – INCOME TAX (cont.)

taxes result principally from temporary differences in the recognition of certain revenue and expense items for financial and income

tax reporting purposes.

Significant components of the Group’s future tax assets are as follows:

OF DEFERRED TAX ASSETS

of deferred tax assets:

Significant components of the Company’s future tax assets are as follows:

OF DEFERRED TAX ASSETS

and development credits

operating losses carry forwards

deferred tax asset before deferred tax liabilities and valuation allowance

deferred tax assets

12 – SEGMENT INFORMATION

Company operates in one operating segment which is design, development and commercialization of non-invasive glucose monitoring devices.

During the reported period no revenue were recognized.

long-lived assets are owned by Integrity Israel which are located in Israel.

Composition of deferred tax assets:

Vacation accrual

Research and development credits

Net operating losses carry forwards

Net deferred tax asset before deferred tax liabilities and valuation allowance

Valuation allowance

Net deferred tax assets

9 – RELATED PARTIES

Garrett, Inc:

September 12, 2022, the Company signed on advisory agreement with Andrew Garrett Inc., which

is controlled by one of member of the Company’s board of directors, Andrew Sycoff.

The Company retains advisor on a non-exclusive basis to receive general business advisory

services for total monthly consideration of $ 20 thousand.

In addition, the Company also agreed

to extend the exercise through July 1, 2026, for all warrants issued pursuant to the Exchange

Agreement dated December 31, 2018.

The Company accounted for the extension of the warrants’

exercise period pursuant to ASC 718 as a modification.

Accordingly, additional compensation

of $ 56 thousand was calculated as the fair value of the modified award in excess of the fair

value of the original award measured immediately before its terms have been modified based

on current circumstances and recorded this incremental fair value as an immediate expense

in 2022 as the warrants were and remained fully vested at the modification date.

the year ended on December 31, 2022, the Company recognized in total expenses of $ 102 thousand due to the above agreement.

Property Purchase Agreement - See Note 6C

Loans From Stockholders – See Note 5

more information regarding warrants granted to Andrew Garrett, Inc.

as placement agent and two parties associated with, including

modification of terms and triggering of down round protection feature, see Note 5C3 above and Note 10 below.

more information regarding the intellectual property purchase agreement from the company’s CEO - See Note 4B above.

more information regarding the loans received from certain Stockholders - See Note 3 above.

Enterprises LLC, dba Virginia Analytical

October 25, 2022, the Company entered into agreement with Tapsak Enterprises LLC dba Virginia

Analytical, which fully owned by Mark Tapsak, who serves as the Vice President of Sensor

Science of the Company , under which, Tapsak Enterprises LLC dba Virginia Analytical,

will provide laboratory space, equipment and materials to support the Company sensor development

activities for total consideration which estimates to be approximately $ 60 thousand.

the year ended on December 31, 2022, the Company recognized in total expenses of $ 38 thousand due to this agreement.

October 25, 2022, the Company entered into agreement with Tapsak Enterprises LLC dba Virginia Analytical, which fully owned by Mark

Tapsak, who serves as the Vice President of Sensor Science of the Company, under which, Tapsak Enterprises LLC dba Virginia Analytical,

is providing laboratory space, equipment and materials to support the Company sensor development activities.

During the years ended

December 31, 2023 and 2022, a total amount of $ 162 and $ 76 were recorded as part of the Company’s research and development expenses,

respectively.

more information regarding execution of lease agreement with Tapsak Enterprises LLC dba Virginia Analytical, see Note 10B below.

10 – SUBSEQUENT EVENTS

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

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

February 13, 2024, the Company entered into an Exchange Agreement with certain shareholders (the “Holders”), pursuant

to which the Company and the Holders agreed to replace (the “Exchange”) warrants exercisable to common shares (the “Warrants”)

owned by the Holders in exchange for shares of Common Stock to be issued by the Company.

February 13, 2024, the Company closed the Exchange and issued to the Holders on February 15, 2024 an aggregate of 3,593,203

shares of Common Stock in exchange for 4,381,953

was also agreed that the Holders will not, during the period (“Lock-Up Period”) (i) offer, pledge, announce the intention

to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option,

right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Shares, (ii) enter into any swap or

other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Shares of, whether any

such transaction described in clause (i) or (ii) above is to be settled by delivery of Shares or such other securities, in cash or

otherwise, (iii) make any demand for or exercise any right with respect to, the registration of any Shares or any security convertible

into or exercisable or exchangeable for shares of common stock, or (iv) publicly announce an intention to effect any transaction

specific in clause (i), (ii) or (iii) above, provided however that the Holder, during the Lock-Up Period, may (a) sell or contract

to sell Shares at a price higher than $0.50 per Share on any trading day up to 10% of the daily volume of Shares or (b) sell or contract

to sell Shares at a price higher than $0.80 per Share on any trading day with no limitation on volume .

Lock-Up Period shall expire at the earliest of (i) 365 days after the date hereof or (ii) until the Shares trade above $ 1.00 per

Share for five consecutive trading days.

February 19, 2024, the Company entered into Lease Agreement (the “Agreement”) with Tapsak Enterprises LLC dba Virginia

Analytical (the “Landlord”) under which it was agreed that the Company will lease from the Landlord a premises located

in Front Royal, Virginia area for a monthly rental fee of $ 2.5 over a period of 3 -years commencing March 1, 2024 through March 31,

2027 (the “Initial Lease Period”).

Security deposit of one month or $ 2.5 will be held by the Landlord and will be return

to the Company at the end of the Initial Lease Period.

addition, the Company has an option to renew the Lease Period for another two additional periods of 3 -years each following the Initial

Lease Period (the “Option Term”), following to advanced notice as defined in the Agreement.

The monthly rental fee over

the Option Term shall be the fair market rate determined as what is a comparable cost for similar property in the Front Royal, Virginia

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-K

Item 9A. Controls and Procedures