What changed in this filing

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Item 1. Financial Statements

2024-08-13 compared with 2024-05-15 · 407 added, 257 removed, 155 unchanged (81% of the section changed)

2 unchanged sentences

thousands of US dollars except share data)

In thousands of US dollars

(except stock data)

Current assets

5 unchanged sentences

Restricted cash

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities

Accounts payable

Operating lease liability, current (Note 3C)

Notes payable (Note 3F)

Operating lease liability, current (Note 3F)

Other current liabilities

2 unchanged sentences

Loans from stockholders

Operating lease liability, non-current (Note 3C)

Operating lease liability, non-current (Note 3F)

Total liabilities

2 unchanged sentences

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

500,000,000 shares authorized as of March 31, 2024 and December 31, 2023;

26,756,369 and 20,892,193 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

Common Stock of $ 0.001

par value (“Common Stock”):

500,000,000 shares authorized as of March 31, 2024 and December 31, 2023;

26,756,369 and

20,892,193 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

100,000,000 shares authorized as of June 30, 2024 and December 31, 2023;

5,478,436 and 4,178,274 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

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

100,000,000 shares authorized as of June 30, 2024 and December 31, 2023;

5,501,164 and 4,178,438 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

2 unchanged sentences

Accumulated deficit

Total stockholders’ equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

The accompanying notes are an integral part of these condensed interim

consolidated financial statements.

Total stockholders’ equity (deficit)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

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

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

thousands of US dollars except share data) (unaudited)

Research and development

General and administrative

Selling and marketing expenses

period ended June 30,

Research and development expenses

Marketing expenses

General and administrative expenses

Total operating expenses

Operating loss

Finance expenses (income), net

Finance income, net

Other comprehensive income:

3 unchanged sentences

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

The accompanying notes are an integral part of these condensed interim

consolidated financial statements.

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

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

2 unchanged sentences

Stockholders’

In thousands of US Dollars (except share data)

Comprehensive

thousands of US Dollars (except share data)

Stockholders’

Balance as of January 1, 2023

Loss for the period

Other comprehensive income

Stock-based compensation

Issuance of restricted shares as compensation towards directors

Restricted shares to be issued as compensation towards directors

Balance as of March 31, 2023

Balance as of January 1, 2024

Loss for the period

Other comprehensive income

Stock-based compensation

Issuance of restricted shares as compensation towards directors

Issuance of restricted shares as payment for achievement of milestone pursuant to purchase agreement (Note 4B)

Restricted shares to be issued as compensation towards directors

Exercise of prefunded warrants into shares (Note 3A)

Exchange of warrants into shares (Note 3B)

Balance as of March 31, 2024

Comprehensive

as of January 1, 2023

$ ( 101,901 )

for the period

comprehensive income

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

of Common Stock and pre-funded warrants upon completion of public offering, net of offering expenses

of shares as compensation to the board of directors

as of June 30, 2023

$ ( 105,218 )

at April 1, 2023

$ ( 103,187 )

for the period

comprehensive income

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

of Common Stock and pre-funded warrants upon completion of public offering, net of offering expenses

of restricted shares as compensation towards directors

as of June 30, 2023

$ ( 105,218 )

as of January 1, 2024

$ ( 109,853 )

for the period

comprehensive income

of restricted shares as compensation towards directors

shares to be issued as compensation towards directors

of Common Stock upon private placement transaction (Note 3D)

of restricted shares as payment for a previous achievement of milestone pursuant to purchase agreement (Note 4B)

of prefunded warrants into shares (Note 3A)

of warrants into shares (Note 3B)

of warrants through private placement transaction (Note 3F)

as of June 30, 2024

$ ( 117,269 )

as of April 1, 2024

$ ( 112,780 )

for the period

of restricted shares as compensation towards directors

of Common Stock upon private placement transaction (Note 3D)

shares to be issued as compensation towards directors

of warrants through private placement transaction (Note 3F)

as of June 30, 2024

$ ( 117,269 )

amount lower than $1.

The accompanying notes are an integral part of these condensed interim

consolidated financial statements.

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

thousands of US Dollars)

Three-month period ended

thousands of US Dollars) (Unaudited)

Six-month period ended

CASH FLOWS FROM OPERATING ACTIVITIES

1 unchanged sentence

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

Depreciation and amortization

Stock-based compensation

2 unchanged sentences

Changes in assets and liabilities:

Increase in other current assets

Increase (decrease) in accounts payable

Increase (Decrease) in other current liabilities

Other current assets

Accounts payable

Other current liabilities

Net cash used in operating activities

2 unchanged sentences

Net cash used in investing activities

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

CASH FLOWS FROM FINANCING ACTIVITIES:

Issuance of notes and warrants through private placement transaction (Note 3F)

Net proceeds received from underwritten U.S.

public offering

Proceeds received from private placement transaction (Note 3D)

Net cash provided by financing activities

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

Change in cash and cash equivalents, and restricted cash

1 unchanged sentence

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

Three-month period ended

Supplemental disclosure of cash flow activities:

(a) Net cash paid during the year for:

(b) Non-cash activities:

Recognition of right for usage asset against a lease liability

The accompanying notes are an integral part of these condensed interim

consolidated financial statements.

(b) Non-cash investment and financing activities:

Deemed dividend upon trigger of down round protection

Recognition of right for usage asset against a lease liability (Note 3C)

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

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands

of US Dollars)

thousands of US Dollars, except share and per share data)

(the “Company”) was incorporated on May 18, 2010 under the laws of the State of Delaware.

The Company is a medical

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

Company is currently developing an Implantable Continuous Blood Glucose Monitor (“CBGM”) for persons with Type 1 diabetes and

insulin-dependent Type 2 diabetes (the “Glucotrack CBGM Product”).

device company, focused on development of an Implantable Continuous Glucose Monitor (CGM) for persons with Type 1 diabetes and insulin-dependent

Type 2 diabetes (the “Glucotrack CBGM Product”).

and capital resources

date, the Company has 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

As of March 31, 2024, the Company has incurred accumulated deficit of $ 112,780 .

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

As of March 31,

2024, the balance of cash and cash equivalents which amounted to $ 1,497,000

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 has determined that these conditions raise substantial doubt about the Company’s ability to

Further development and commercialization efforts are expected

to require substantial additional expenditure.

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

As of June 30, 2024, the Company has incurred accumulated deficit of $ 117,269 .

Furthermore, the Company has generated operating losses

and negative operating cash flow for all reported periods.

As of June 30, 2024, the balance of cash and cash equivalents amounted

to $ 159 together with additional amounts raised subsequent to the balance sheet date amounted to $ 4,360 thousand are insufficient

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

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

during the period of six month ended June 30, 2024, the Company entered into (i) exchange agreement with certain shareholders under which

warrants with down round protection feature have been exchanged into shares of common stock in order to facilitate its equity structure

(see also Note 3B), (ii) private placement agreement under which the Company raised proceeds of $ 500 (see also Note 3D) and (iii) note

and warrant agreement under which the Company raised proceeds of $ 80 (see also Note 3F).

addition, subsequent to the balance sheet date, the Company entered into (i) convertible promissory notes under which the Company

raised gross proceeds of $ 360 (see also Note 5A) and (ii) convertible promissory notes and warrants agreement under which the Company

raised gross proceeds of $ 4,000 (see also Note 5B).

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

There can 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.

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 concern.

the year ended December 31, 2023, the Company raised net proceeds of $ 8,730

through completion of an underwritten public offering.

In addition, during the year ended December 31, 2023, the Company entered

into exchange agreement with certain shareholders under which warrants with down round protection feature have been exchanged into

shares of common stock in order to improve its equity structure to enable the completion of a planned equity financing (see also

Moreover, in April 2024, the Company raised net proceeds of $ 500,000

through completion of private placement transaction (see also Note 5A).

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 $ 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, if any, in order to continue its operations as a going concern.

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

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

thousands of US Dollars)

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

of Presentation

accompanying unaudited condensed interim consolidated financial statements and related notes should be read in conjunction with the

Company’s consolidated financial statements and related notes included in the Company’s annual report on Form 10-K for

the fiscal year ended December 31, 2023, as was filed with the SEC on March 28, 2024.

The unaudited condensed interim consolidated

financial statements have been prepared in accordance with the rules and regulations of the SEC related to interim financial

As permitted under those rules, certain information and footnote disclosures normally required or included in financial

statements prepared in accordance with U.S.

the fiscal year ended December 31, 2023, as was filed with the Securities and Exchange Commission (“SEC”) on March 28,

The unaudited condensed interim consolidated financial statements have been prepared in accordance with the rules and regulations

of the SEC related to interim financial statements.

As permitted under those rules, certain information and footnote disclosures

normally required or included in financial statements prepared in accordance with U.S.

GAAP have been condensed or omitted.

The financial information contained herein is

however, management believes all adjustments have been made that are considered necessary to present fairly the results

of the Company’s financial position and operating results for the interim periods.

All such adjustments are of a normal

recurring nature.

results for the period of three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the

year ending December 31, 2024 or for any other interim period or for any future period.

GLUCOTRACK INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of US Dollars)

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

Use of Estimates in the Preparation of Financial Statements

The financial

information contained herein is unaudited;

however, management believes all adjustments have been made that are considered necessary

to present fairly the results of the Company’s financial position and operating results for the interim periods.

All such adjustments

are of a normal recurring nature.

results for the period of three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for

the year ending December 31, 2024 or for any other interim period or for any future period.

of Estimates in the Preparation of Financial Statements

preparation of the condensed interim consolidated financial statements in conformity with US GAAP requires management to make estimates

4 unchanged sentences

Management believes that there are no critical accounting estimates in these financial statements.

Principles of Consolidation

of Consolidation

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

1 unchanged sentence

balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

equivalents are short-term highly liquid investments which include short term bank deposits (up to three months from the date of

deposit), that are not restricted as to withdrawals or use that are readily convertible to cash with maturities of three months or

less as of the date acquired.

and Cash Equivalents

equivalents are short-term highly liquid investments which include short term bank deposits (up to three months from date of deposit),

that are not restricted as to withdrawals or use that are readily convertible to cash with maturities of three months or less as

of the date acquired.

of equity-classified contracts

modification or exchange of equity-classified contracts, such as warrants that were classified as equity before the modification

or exchange and remained eligible for equity classification after the modification, is accounted for in a similar manner to a modification

of stock-based compensation.

Accordingly, the incremental fair value from the modification or exchange (the change in the fair value

of the instrument before and after the modification or exchange) is recognized as a reduction of retained earnings of increase of

accumulated deficit as a deemed dividend.

Modifications or exchanges that result in a decrease in the fair value of an equity-classified

share-based payment awards are not recognized.

In addition, the amount of the deemed dividend is also recognized as an adjustment

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

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

thousands of US Dollars)

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

warrants that were issued to several holders are classified as a component of permanent equity since they are freestanding financial

instruments that are legally detachable and separately exercisable, do not embody an obligation for the Company to repurchase its

own shares, and permit the holders to receive a fixed number of Ordinary Shares upon exercise for a fixed exercise price and thus,

are considered as indexed to the Company’s own shares.

As such warrants were issued together with financial instruments that

are not subsequently measured at fair value and the warrants were measured based on allocation of the proceeds received by the

Company in accordance with the relative fair value basis.

When applicable, direct issuance expenses that were allocated to certain

warrants were deducted from additional paid-in capital.

Company applies ASC Topic 842, “Leases” (“ASC 842”) under which the

17 unchanged sentences

classified as operating leases.

of Usage (“ROU”) assets and liabilities are recognized on the commencement date based on the present value of remaining

of Use (“ROU”) assets and liabilities are recognized on the commencement date based on the present value of remaining

lease payments over the lease term.

1 unchanged sentence

time of commencement.

As the Company’s leases do not provide an implicit rate, the Company uses its Incremental Borrowing

As most of the Company’s leases do not provide an implicit rate, the Company uses its Incremental Borrowing

Rate (“IBR”) based on the information available on the commencement date in determining the present value of lease payments.

13 unchanged sentences

will not exercise the option.

GLUCOTRACK INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of US Dollars)

thousands of US Dollars)

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

Modification of equity-classified contracts

modification or exchange of equity-classified contracts, such as warrants that were classified as equity before the modification or

exchange and remained eligible for equity classification after the modification, is accounted for in a similar manner to a

modification of stock-based compensation.

Accordingly, the incremental fair value from the modification or exchange (the change in

the fair value of the instrument before and after the modification or exchange), if any, is recognized as a reduction of retained

earnings of increase of accumulated deficit as a deemed dividend.

Modifications or exchanges that result in a decrease in the fair

value of an equity-classified instrument are not reflected in accumulated deficit.

addition, the amount of the deemed dividend is also recognized as an adjustment to earnings available to common shareholders for

purposes of calculating earnings per share.

Basic and diluted loss per share

loss per share is computed by dividing the loss for the period applicable for Common Stockholders by the weighted average number of shares of Common Stock outstanding.

computing, diluted loss per share, basic earnings per share are adjusted to reflect the potential dilution that could occur upon

the exercise of options or warrants issued or granted using the “treasury stock method,” if the effect of each of such

financial instruments is dilutive.

computing diluted loss per share, the average stock price for the period is used in determining the number of Common Stock assumed

to be purchased from the proceeds to be received from the exercise of stock options or stock warrants.

that will be issued upon the exercise of all stock options and stock warrants (other than pre-funded warrants), have been excluded

from the calculation of the diluted net loss per share for all the reported periods for which net loss was reported because the

effect of the common shares issuable as result of the exercise or conversion of these instruments was anti-dilutive.

GLUCOTRACK INC.

and diluted loss per share

loss per share is computed by dividing the loss for the period applicable (after considering

the effect of deemed dividend related to trigger of down round protection feature) for Common

Stockholders by the weighted average number of shares of Common Stock outstanding and shares

of Common Stock to be issued upon achievement of performance milestone during the period

and upon exercise of pre-funded warrants.

computing, diluted loss per share, basic earnings per share are adjusted to reflect the potential

dilution that could occur upon the exercise of options or warrants issued or granted using

the “treasury stock method”, if the effect of each of such financial instruments

In computing diluted loss per share, the average stock price for the period

is used in determining the number of Common Stock assumed to be purchased from the proceeds

to be received from the exercise of stock options or stock warrants.

to be issued upon exercise of all stock options and stock warrants, have been excluded from the calculation of the diluted net loss

per share for all the reported periods for which net loss was reported because the effect of the common shares issuable as result

of the exercise or conversion of these instruments was anti-dilutive.

net loss and the weighted average number of shares of Common Stock used in computing basic and diluted net loss per Common Stock

for the period of six and three month ended June 30, 2024 and 2023, is as follows:

OF ANTIDILUTIVE NET LOSS AND WEIGHTED AVERAGE

US dollars (except share data)

Six-month period ended

Three-month period ended

Deemed dividend related to trigger of down round protection feature

Net loss attributable to common stockholders

Shares of Common Stock used in computing basic and diluted net loss per common stock

Shares of Common Stock to be issued upon exercise of pre-funded warrants

Shares of Common Stock to be issued upon achievement of

second performance milestone

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

Basic and diluted net loss per common stock

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

(in thousands of US Dollars)

thousands of US Dollars)

3 - SIGNIFICANT TRANSACTIONS

Exercise of pre-funded warrants

On January 3, 2024, a number of 1,976,470 pre-funded warrants granted through underwritten public offering in April

2023 have been fully exercised into the same number of shares of Common Stock of the Company.

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

of pre-funded warrants

January 3, 2024, a number of 395,294 pre-funded warrants granted through underwritten public offering in April 2023 have been fully

exercised into the same number of shares of Common Stock of the Company.

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

to which the Company and the Holders agreed to exchange (the “Exchange”) warrants with down round protection feature

exercisable to common shares (the “Warrants”) owned by the Holders for shares of Common Stock to be issued

by the Company.

exercisable to common shares (the “Warrants”) owned by the Holders 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 718,641 shares

16 unchanged sentences

Share for five consecutive trading days.

Company accounted for the Exchange of the aforesaid warrants as deemed dividend which was calculated at the closing date by the

management using the assistance of external appraiser as the excess of fair value of the share to be issued after taking into consideration a discount for lack of marketability at a rate of 16.81% over the Lock-Up Period

over the fair value of the original equity instrument (i.e.

Company accounted for the Exchange of the aforesaid warrants with shares as deemed dividend which was calculated at the closing date

by the management using the assistance of external appraiser as the excess of fair value of the share to be issued after taking into

consideration a discount for lack of marketability at a rate of 16.81% over the Lock-Up Period over the fair value of the original

equity instrument (i.e.

warrants which included down round protection feature).

However, since the fair

value of the new equity instrument was estimated as lesser than the fair value of the replaced equity instrument, deemed dividend was not recorded.

However, since the fair value of the new equity instrument

was estimated as lesser than the fair value of the replaced equity instrument, deemed dividend was not recorded.

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 February 28, 2027 (the “Initial Lease Period”).

A security deposit of $ 2.5

which represents a one month payment is held by the Landlord and will be returned to the Company at the end of the

Initial Lease Period.

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

28, 2027 (the “Initial Lease Period”).

Security deposit of $ 2.5 which represents payment of one month is held by the

Landlord which will be return to the Company at the end of the Initial Lease Period.

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

1 unchanged sentence

The monthly rental

fee over the Option Term shall be the fair market rate which is determined as the comparable cost for similar property in

the Front Royal, Virginia area.

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

Virginia area.

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

thousands of US Dollars)

3 - SIGNIFICANT TRANSACTIONS (CONT.)

Agreement (Cont.)

accordance with the provision of ASC 842, Leases, at the commencement date of the Agreement,

1 unchanged sentence

The lease liability was measured at the present value of the future lease payments,

which are discounted based on an estimate of the estimated interest rate that the Company

which are discounted based on an estimate of the additional interest rate that the Company

would be required to pay in order to borrow a similar amount for a similar period in order

to obtain a similar amount on the date of first recognition of the lease (using a discount

rate of 9.03 %).

part of the lease term, the Company considered only the Initial Lease Period, as the exercise of the option to extend the period

to obtain a similar amount on the date of first recognition of the lease.

part of the leasing period, the Company considered only the Initial Lease Period as the realization of the option to extend the period

was not considered as reasonably certain.

of usage asset:

OF RIGHT OF USAGE ASSET

Balance as of January 1, 2024

Balance as of March 31, 2024

Accumulated amortization

Balance as of January 1, 2024

Balance as of March 31, 2024

Amortized cost as of March 31, 2024

OF LEASE LIABILITY

Balance as of January 1, 2024

Interest expenses

Lease payments

Balance as of March 31, 2024

recognized in statements of cash flow:

OF AMOUNT RECOGNIZED OF OPERATING LEASE

Three months period ended

March 31, 2024

Amortization of the right for usage asset

Interest expense in respect of lease liability

Repayment of principal in respect of lease liability

negative cash flows in respect of leasing for the period of three months ended March 31, 2024 are approximately $ 3 .

of contractual payment dates of lease liability as of March 31, 2024:

OF CONTRACTUAL PAYMENT LEASE LIABILITY

right of use asset

operating lease liability

analysis of the Company’s lease liability:

ANALYSIS OF LEASE LIABILITY

Less than one

Between 1-2 years

More than 2 years

Total (undiscounted)

GLUCOTRACK INC.

operating lease payments

imputed interest

Present value of lease

information on lease

following is a summary of weighted average remaining lease terms and discount rate for Company’s leases:

OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATE

Lease term (years)

Weighted average discount rate

Placement Agreement

April 22, 2024, the Company entered into a private placement agreement under which the Company

issued 79,366 shares of its common stock at a price of $ 6.3 per share for aggregate gross

proceeds of $ 500 (the “Offering”).

The Offering included participation of certain

members of the Company’s executive management, Board of Directors and existing shareholders.

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

(in thousands of US Dollars)

thousands of US Dollars)

3 - SIGNIFICANT TRANSACTIONS (CONT.)

of 2024 Equity Incentive Plan and Reverse Share Split

April 26, 2024, the Company held its Annual Meeting of Shareholders (the “Annual Meeting”)

under which the Company’s stockholders approved, inter alia, the following proposals:

(i) adoption of the Company’s 2024 Equity Incentive Plan and (ii) an amendment to Article

IV of the Company’s Certificate of Incorporation, to effect a reverse stock split of

the Company’s Common Stock at a ratio of between one-for-five and one-for-thirty, with

such ratio to be determined at the sole discretion of the Board of Directors.

Following the

Annual Meeting, on April 30, 2024, the Company’s Board of Directors approved a one-for-five

reverse stock split of the Company’s issued and outstanding shares of common stock

(the “Reverse Stock Split”).

On May 17, 2024, the Company filed a Certificate

of Amendment to the Company’s Certificate of Incorporation with the Secretary of State

of the State of Delaware which effected the Reverse Stock Split.

accounting purposes, all shares, options and warrants to purchase shares of common stock and loss per share amounts have been adjusted

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

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

and Warrant Purchase Agreements

June 27, 2024, the Board of Directors approved the Company to enter into note and warrant

purchase agreements with certain officers, directors and existing investors, providing

for the private placement of unsecured promissory notes in the aggregate principal amount

of $ 100 (the “Notes”) and warrants to purchase up to an aggregate of 300,000

shares of the Company’s Common Stock (the “Warrants”).

Notes bear simple interest at the rate of 3% per annum and are due and payable in cash on the earlier of:

(i) twelve months from

the date of the Note;

or (ii) the date the Company raises third-party equity capital in an amount equal to or in excess of $1,000

(the “Maturity Date”).

The Company may prepay the Notes at any time prior to the Maturity Date without penalty.

event of default occurs, the then-outstanding principal amount of the Notes plus any unpaid accrued interest will accelerate and

become immediately payable in cash.

Warrant has an exercise price of $ 4.95 per share and immediately exercisable and have a five-year term.

Such Warrant was determined

as eligible for equity classification.

the initial date, the total proceeds received of $ 80 were allocated to the Notes and the Warrants based on their relative fair value

of the identified components (i.e.

Notes and Warrants) as determined by the Company’s management as follows:

OF FAIR VALUE

OF THE IDENTIFIED COMPONENTS

value at Closing Date

fair value of the Notes was determined based on rating model using a discount rate of 12 %

which represented the Company’s applicable rate of risk, as determined by management.

fair value of the Warrants determined by management based on Black-Scholes pricing model taking into account expected stock price

volatility of 245 % and risk-free interest rate of 4.52 %.

Note is accounted for as a financial liability measured at amortized cost.

At subsequent dates, the Company recognized a discount expense

over the economic life of the Notes based on the effective interest rate method.

However, during the period of six month, discount expense

were de minimis.

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

thousands of US Dollars)

4 - COMMITMENTS AND CONTINGENT LIABILITIES

March 4, 2004, the IIA provided Integrity Israel with a grant of approximately $ 93

(NIS 420,000 ),

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 March 31, 2024, the remaining contingent liability with

respect to royalty payment on future sales equals approximately $ 73

On March 4, 2004, the Israeli

Innovation Authority (IIA) provided Integrity Israel with a grant of approximately $ 93 (NIS 420,000 ), 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 June 30, 2024, 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 an Intellectual Property Purchase Agreement (the

“Agreement”) with Paul Goode, the Company’s Chief Executive Officer (the “Seller”), under which the

parties agreed that on and subject to the terms and conditions of the Agreement, at the Closing Date, the Seller shall sell, assign,

transfer, convey and deliver to the Company, all of the Seller’s right, title and interest in and to the following assets,

properties and rights (collectively, the “Purchased Assets”):

rights, title, interests in all current and future intellectual property, including, but not limited to patents, trademarks, trade

secrets, industry know-how and other IP rights relating to an implantable continuous glucose sensor (collectively, the “Conveyed

Intellectual Property”);

the goodwill relating to the Purchased Assets.

consideration for the sale by the 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 the Company to issue up to 1,000,000

shares of its Common Stock to be issued based upon specified performance milestones as set forth in the Agreement (the

“Purchase Price”).

Such contingent obligation has no expiration date.

On October 7, 2022 (“the

Closing Date”), the Company entered into Intellectual Property Purchase Agreement (the “Agreement”) with Paul Goode,

which is the Company’s Chief Executive Officer (the “Seller”), under which it was agreed that on and subject to

the terms and conditions of the Agreement, at the Closing Date, Seller shall sell, assign, transfer, convey and deliver to the Company,

all of Seller’s right, title and interest in and to the following assets, properties and rights (collectively, the “Purchased

All rights, title, interests

in all current and future intellectual property, including, but not limited to patents, trademarks, trade secrets, industry know-how

and other IP rights relating to an implantable continuous glucose sensor (collectively, the “Conveyed Intellectual Property”);

All 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 200,000 shares of 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

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 Shares”).

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.

200,000 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 Shares”).

All shares of Common Stock of the company that will be issued under this agreement shall be (i) restricted over a limited period

as defined in the Agreement 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 as when there is no substantive process in the acquired entity) the transaction is

accounted for as an asset acquisition and no goodwill is recognized.

The 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.

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”)

to be used in research and development projects which have been determined not to have alternative future use at the acquisition

date, is expensed immediately.

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

However, the achievement of each of the performance milestones is considered as a 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.

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 the fulfilment of the first

performance milestone the Company was committed to issue 100,000

restricted shares to the Seller.

in 2023, the Company recorded an amount of $ 131

as research and development expenses with

a similar amount as an increase to additional paid-in capital.

The shares were issued on February 6, 2024.

As of March 31, 2024,

the achievement of all other remaining performance milestones was not considered probable and thus nothing was accrued with respect

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.

In 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 the fulfilment of the first performance milestone the Company

was committed to issue 20,000 restricted shares to the Seller.

Accordingly, the Company recorded an amount of $ 131 as research and development

expenses with a similar amount as an increase to additional paid-in capital.

The first performance milestone shares were issued on February

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

thousands of US Dollars)

4 - COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)

May 2024, the Company achieved the second 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 result, the Company is committed to issue 30,000 restricted shares to the

Accordingly, the Company recorded stock-based compensation expenses amounted to $ 192 which representing the quoted price of its

Common Stock at the Closing Date, after taking into consideration a discount for lack of marketability in a rate of 30 % over the applicable

restriction period.

As of June 30, 2024, the second performance milestone shares were not yet issued.

of June 30, 2024, achievement of all other remaining performance milestones was not considered probable and thus no stock-based compensation

expenses were recorded with respect to thereof.

5 - SUBSEQUENT EVENTS

Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed interim

consolidated financial statements were issued May 15, 2024.

Based upon this review, the Company did not identify any subsequent events

that would have required adjustment or disclosure in the financial statements, except as follows:

Private Placement Agreement

April 22, 2024, the Company entered into private placement agreement under which the Company issued 396,825

shares of its common stock at a price of $ 1.26

per share for aggregate gross proceeds of $ 500,000

(the “Offering”).

The Offering included the participation of certain members of the Company’s executive

management, Board of Directors and existing shareholders.

were no warrants issued and no commissions or brokerage fees paid in connection with the Offering.

the Company’s annual meeting of stockholders held on April 26, 2024, the stockholders of the Company approved a proposal to authorize

the Company’s Board of Directors (the “Board”) to file a Certificate of Amendment to the Company’s Certificate

of Incorporation, as amended, to effect a reverse stock split of the Company’s common stock, par value $0.001 per share at a ratio

between 1-for-5 and 1-for-30, to be effected at such time and date, if at all, as determined by the Board in its sole discretion (the

“Reverse Stock Split”).

On April 30, 2024, the Board approved the Reverse Stock Split.

of the date of the filing of this Quarterly Report on 10-Q, the Company has not filed the Certificate of Amendment to implement the Reverse

Stock Split, and the Reverse Stock Split is not effective as of the time of filing.

On July 18, 2024, the

Company entered into a series of convertible promissory notes with three directors, and one member of the Company’s executive

management, providing for the private placement of unsecured convertible promissory notes in the aggregate principal amount of

$ 360 (the “Notes” and each a “Note”).

Notes bear simple interest at the rate of 8 % per annum and are due and payable in cash on the earlier of:

(i) 12-months anniversary of

Note, or (ii) the date of closing of a Qualified Financing (as defined below) (the “Maturity Date”).

regarding conversion of the Notes as discussed below, the Company may not prepay the Notes without the written consent of the holder.

If not sooner repaid, all outstanding principal and accrued but unpaid interest on the Notes (the “Note Balance”), as of

the close of business on the day immediately preceding the date of the closing of the next issuance and sale of capital stock of the

Company, in a single transaction or series of related transactions, to investors resulting in gross proceeds to the Company of at least

(excluding indebtedness converted in such financing) (a “Qualified Financing”), will automatically be converted into that

number of shares of equity securities of the Company sold in the Qualified Financing equal to the number of shares calculated by dividing

(X) the Note Balance by (Y) an amount equal to the price per share or other unit of equity securities issued in such Qualified Financing,

and otherwise on the same terms as the security issued in the Qualified Financing, provided that the conversion price per share shall

not be lower than $ 1.56 .

the occurrence of an Event of Default (as defined below), a holder may, by written notice to the Company, declare the Note to be due

immediately and payable with respect to the Note Balance.

An “Event of Default” means (i) failure by the Company to pay the

Note Balance on the Maturity Date, (ii) voluntary bankruptcy, or (iii) involuntary bankruptcy.

Upon the occurrence of an Event of Default

specified in clause (iii) above, the Note Balance shall automatically and immediately become due and payable, in all cases without any

action on the part of the holder.

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

thousands of US Dollars)

5 - SUBSEQUENT EVENTS (Cont.)

July 30, 2024, the Company entered into a convertible promissory note and three warrant agreements

(the “Warrants”) with an existing investor (the “Holder”), providing

for the private placement of a secured convertible promissory note in the aggregate principal

amount of $ 4,000 (the “Note”).

The Note is not convertible until and unless approved

at a meeting of the Company’s stockholders (the “Stockholder Approval”).

Company has agreed to hold such a meeting to seek Stockholder Approval within 90 days.

Note bears simple interest at the rate of 8 % per annum and is due and payable in cash on the earlier of:

(i) 12 months anniversary of

Note, or (ii) the date of closing of a Sale Transaction (defined below) (the “Maturity Date”) .

The Note is secured by a first-priority

security interest on all Company assets.

with regard to conversion of the Note a or a Sale Transaction as discussed below, the Company may not prepay the Note without the written

consent of the Holder.

If Stockholder Approval is obtained, the Note (i) is convertible at the discretion of the Holder at a price equal

to the closing price of the Common Stock on the date of conversion and, (ii) if the Closing Price of the Common stock exceeds $ 5.00 per

share for a period of 5 consecutive trading days, will automatically convert at a price equal to the 5 daily Volume Weighted Average

Price (“VWAP”) of the Common Stock (subject to adjustment for any stock split, stock dividend, reverse stock split, combination

or similar transaction).

the event of a Sale Transaction on or prior to the Maturity Date, the Company will repay the Holder, at the Holder’s election,

(i) cash equal to 200% of the Note balance, or (ii) transaction consideration in the amount to be received by the Holder

in such Sale Transaction if the Note was converted pursuant to an optional conversion.

“Sale Transaction” means a merger

or consolidation of the Company with or into any other entity, or a sale of all or substantially all of the assets of the Company, or

any other transaction or series of related transactions in which the Company’s stockholders immediately prior to such transaction(s)

receive cash, securities or other property in exchange for their shares and, immediately after such transaction(s), own less than 50%

of the equity securities of the surviving corporation or its parent .

the occurrence of an Event of Default (defined below), a Holder may, by written notice to the Company, declare the Note to be due immediately

and payable with respect to the Note balance.

An “Event of Default” means (i) failure by the Company to pay the Note balance

on the Maturity Date, (ii) the Company becomes subject to a judgement of more than $ 50,000 , (iii) voluntary bankruptcy, or (iv) involuntary

Upon the occurrence of an Event of Default specified in clause (iii) above, the Note balance shall automatically and immediately

become due and payable, in all cases without any action on the part of the Holder.

Warrant becomes exercisable 12 months after its issuance and has term of 10 years.

The Warrants are exercisable for cash only and have

no price-based antidilution.

The first Warrant is for 2,133,334 shares at $ 1.875 per share.

The second Warrant is for 1,523,810 shares

at $ 2.625 per share.

The third Warrant is for 1,185,186 shares at $ 3.375 per share.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements