What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-13 compared with 2024-05-15 · 179 added, 136 removed, 82 unchanged (79% of the section changed)

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We are currently developing an Implantable CBGM for those with Type 1 diabetes and insulin-dependent Type 2 diabetes.

Company was founded with a mission to develop GlucoTrack®, a non-invasive glucose monitoring device designed to help people

with diabetes and pre-diabetics obtain glucose level readings without the pain, inconvenience, cost and difficulty of conventional (invasive)

spot finger stick devices.

The first generation of GlucoTrack, which successfully received CE Mark approval, obtained glucose measurements

via a small sensor clipped onto one’s earlobe.

A limited release beta test in Europe and the Middle East demonstrated the need

for an updated product with improved accuracy and human factors.

Company was founded with a mission to develop Glucotrack®, a noninvasive glucose monitoring device designed to help people with diabetes

and pre-diabetics obtain glucose level readings without the pain, inconvenience, cost and difficulty of conventional (invasive) spot

finger stick devices.

The first generation Glucotrack, which successfully received CE Mark approval, obtained glucose measurements via

a small sensor clipped onto one’s earlobe.

A limited release beta test in Europe and the Middle East demonstrated the need for

an updated product with improved accuracy and human factors.

As the glucose monitoring landscape rapidly moved away from point-in-time

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of any further iterations.

Company is currently developing an implantable CBGM for use by Type 1 diabetes patients as well as insulin-dependent Type 2

Company is currently developing an Implantable CBGM for use by Type 1 diabetes patients as well as insulin-dependent Type 2 patients.

Implant longevity is key to the success of such a device.

We have recently completed a feasibility study successfully

demonstrating that a minimum two-year implant life is highly probable with the current sensor design.

We have also initiated an

animal study with an initial prototype system that has thus far demonstrated a simple implant procedure and good functionality.

Company will initiate a long-term animal trial in late Q4 2024 as well as initiate development of its commercial device, also in

late Q4, in preparation of regulatory submission in late 2024 for a first in human study.

We believe our technology, if successful,

has the potential to be more accurate, more convenient and have a longer duration than other implantable glucose monitors that are

either in the market or currently under development.

are currently developing our own mobile companion application and a cloud-based solution platform to provide real time, data driven

personalized tools to effectively help users manage their diabetes.

In addition to being a critical and effective management tool for

the end user, we believe that third parties such as insurers, pharmaceutical companies and advertisers would be willing to pay for

the de-identified data that we will obtain through our platform, and that this is an opportunity for us to develop an additional

revenue source.

We have continued to evolve our sensor chemistry following our successful in-vitro

feasibility study demonstrating that a minimum two-year implant life is highly probable with the current sensor design.

Recently we announced

a 3-year longevity is feasible leveraging both in-vitro and in-silico test results.

We have also completed our animal study with an initial

prototype system which demonstrated a simple implant procedure and good functionality.

The results of both were recently presented in

poster form at the American Diabetes Association annual conference.

The Company has also initiated a longer-term animal trial (to support

projected longevity studies) as well as development of its commercial device.

A regulatory submission has been made for a first in human

study, expected to initiate in Q3 2024.

Further to the above progress on our CBGM product, we have also successfully demonstrated continuous

glucose sensing in the epidural space.

This latter approach is of importance for patients with painful diabetic neuropathy contemplating

spinal cord stimulation therapy for their condition.

We believe our technology, if successful, has the potential to be more accurate,

more convenient and have a longer duration than other implantable glucose monitors that are either in the market or currently under development.

Senior Management team includes;

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at Dexcom and Medtronic, and Drinda Benjamin, Vice President of Marketing, a medical device professional with over 20 years of experience

in the medical device and diabetes industry with senior roles at Intuity Medical, Senseionics, Abbott Diabetes, and Medtronic Diabetes.

in the medical device and diabetes industry with senior roles at Intuity Medical, Senseonics, Abbott Diabetes, and Medtronic Diabetes.

Erin Carter, formerly of Medtronic and Boston Scientific, has joined as an independent board member.

Several highly talented and accomplished

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These include Daniel McCaffrey MBA MA, a world-renowned behavioral scientist

and digital health expert formerly at Samsung Health and Dexcom, Inc., Dr.

Alexander Raykhman PhD, a measurement and artificial intelligence

expert and Dr.

Klonoff, world renowned endocrinologist and diabetes technology thought leader.

We intend to continue to invest

in our talent and to expand and strengthen all areas within the Company.

previously reported, on May 26, 2023, the Company received a staff deficiency notice from The Nasdaq Stock Market (“Nasdaq”)

indicating that the Company no longer complied with the $1.00 minimum bid price requirement for continued listing on the Nasdaq Capital

Market under Rule 5550(a)(2) of the Nasdaq Listing Rules (the “Bid Price Rule”).

Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A),

the Company was provided with a compliance period of 180 calendar days, or until November 22, 2023, to regain compliance with the Bid

November 24, 2023, the Company received a notice from Nasdaq stating that it has been granted an additional 180

calendar days, or until May 20, 2024, to regain compliance with the Bid Price Rule (the “Extended Compliance Period”).

If at any time during the Extended Compliance

Period, the closing bid price of our Common Stock is at least $1.00 per share for a minimum of 10 consecutive business days, the Nasdaq will provide written confirmation that we have regained compliance with the Bid Price Rule.

If we cannot demonstrate

compliance during the Extended Compliance Period, then Nasdaq will provide notice that our Common Stock will be subject

to delisting.

At that time, the Company may appeal the Staff’s determination to a

hearings panel.

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.

Among other considerations, the Company

plans to implement the Reverse Stock Split to satisfy the Bid Price Rule for continued listing on Nasdaq.

There can be no assurance that

we will be able to regain and sustain compliance with all applicable requirements for continued listing on Nasdaq.

In the event that

we are unable to regain and sustain compliance with all applicable requirements for continued listing on the Nasdaq, our common stock

may be delisted from Nasdaq.

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 exchange 4,381,953 of common stock purchase warrants owned by the Holders for 3,593,203 shares

of the Company’s common stock, par value $0.001 per share.

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

Condition and Results of Operations of our fiscal 2023 Form 10-K.

An accounting policy is deemed to be critical if it requires an accounting

estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates

reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements.

There have been no material changes to the critical accounting policies and estimates as filed in such report.

and digital health expert formerly at Samsung Health and Dexcom, Inc., and Dr.

Klonoff, world renowned endocrinologist and diabetes

technology thought leader.

We intend to continue to invest in our talent and to expand and strengthen all areas within the Company.

April 22, 2024, we entered into a private placement agreement under which we issued 79,366 shares of our common stock at a price of $6.3

per share for aggregate gross proceeds of $500,000 to certain members of our executive management, Board of Directors and existing shareholders.

April 26, 2024, we held our Annual Meeting of Shareholders (the “Annual Meeting”) under which our stockholders approved,

inter alia, the following proposals:

(i) adoption of our 2024 Equity Incentive Plan;

(ii) approved of an amendment to Article IV of our

Certificate of Incorporation, as amended, 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 Board of Directors approved a one-for-five reverse split of our issued and outstanding shares of Common Stock

(the “Reverse Stock Split”).

On May 17, 2024, we 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.

On June 27, 2024, the Board of Directors

approved us to enter into note and warrant purchase agreements with certain investors, providing for the private placement of unsecured

promissory notes in the aggregate principal amount of $100,000 (the “Notes”) and warrants (the “Warrants”) to

purchase up to an aggregate of 300,000 shares of our Common Stock.

The closing of the private placement occurred on July 1, 2024.

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

(a) twelve months from the

date of the Note;

or (b) the date we raise third-party equity capital in an amount equal to or in excess of $1,000,000 (the “Maturity

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

If an 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.

Each Warrant has

an exercise price of $4.95 per share.

The Warrants are immediately exercisable and have a five-year term.

July 18, 2024, we entered into a series of convertible promissory notes with certain investors, providing for the private placement of

unsecured convertible promissory notes in the aggregate principal amount of $360,000 (the “Notes” and each a “Note”).

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

(a) the twelve month anniversary

of Note, or (b) the date of closing of a Qualified Financing (as defined above).

Interest will be computed on the basis of a 365-day

July 30, 2024, we 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 $4,000,000 (the “Note”).

The Note is not convertible until and unless approved at a meeting of our stockholders.

We have agreed to hold such a meeting to seek stockholder approval within 90 days.

The 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

(as defined above) (the “Maturity Date”).

The Note is secured by a first-priority security interest on all our assets.

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.

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

and Results of Operations of our fiscal 2023 Form 10-K.

An accounting policy is deemed to be critical if it requires an accounting estimate

to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably

could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements.

have been no material changes to the critical accounting policies and estimates as filed in such report.

and Capital Resources

date, we have not generated any revenues and have experienced net losses and negative cash flows from our activities.

our incorporation, we have devoted substantially all our resources to research and product development and providing general and administrative

support for these activities.

Since our incorporation, we have incurred significant losses and negative cash flows from operations.

the six months ended June 30, 2024, we incurred a net loss of approximately $7.5 million and used $4.8 million of cash in our operations.

As of June 30, 2024, we had an accumulated deficit of approximately $117.3 million.

We expect to continue to incur significant and increasing

losses and do not expect positive cash flows from operations for the foreseeable future, and our net losses may fluctuate significantly

from period to period depending on the timing of and expenditures on our research and development activities.

of June 30, 2024, the balance of cash and cash equivalents of approximately $159,000 is insufficient for the Company to realize its business

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

of Operations

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

31, 2024 compared with the same periods ended March 31, 2023.

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

June 30, 2024 compared with the same periods ended June 30, 2023.

The discussion should be read in conjunction with the financial statements

and related notes included elsewhere in this report.

Results of Operations for the Three Months ended March 31, 2024 and 2023

Results of Operations for the Three Months Ended June 30, 2024 and 2023

and development expenses

and development expenses were approximately $2.1 million for the three-month period ended March 31, 2024, as compared to approximately

and development expenses were approximately $3.6 million for the three-month period ended June 30, 2024, as compared to approximately

$627,000 for the prior-year period.

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

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

We expect research and development expenses to increase in 2024 and beyond, primarily due to hiring additional personnel, as well the

development of Glucotrack CBGM;

however, we may adjust or allocate the level of our research and development expenses based on available

financial resources and based on our commercial needs, including the FDA registration process, specific requirements from customers,

development of new Glucotrack CBGM models and others.

Marketing expenses

Marketing expenses were approximately $70,000

for the three-month period ended March 31, 2024, as compared to $0 for the prior-year period.

This increase is primarily attributable

to business development personnel and professional marketing services.

The increase is attributable to ramping up product development actives.

and development expenses consist primarily of salaries and other personnel-related expenses, materials, animal trials, production labor

and other expenses.

We expect research and development expenses to marginally increase in 2025 and beyond, primarily due to hiring additional

personnel, as well clinical trials for the Glucotrack CBGM;

however, we may adjust or allocate the level of our research and development

expenses based on available financial resources and based on our commercial needs, including the FDA registration process, specific requirements

from customers, development of new Glucotrack CBGM models and others.

expenses were approximately $100,000 for the three-month period ended June 30, 2024, as compared

to $0 for the prior-year period.

This increase is primarily attributable to business development

personnel and professional marketing services.

and administrative expenses

and administrative expenses were approximately $733,000 for the three-month period ended March 31, 2024, as compared to approximately

and administrative expenses were approximately $802,000 for the three-month period ended June 30, 2024, as compared to approximately

$552,000 for the prior-year period.

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and professional fees for legal and accounting services.

income (expenses), net

income, net was approximately $24,000 for the three-month period ended March 31, 2024, as compared to financing expense of approximately

income, net was approximately $2,000 for the three-month period ended June 30, 2024, as compared to financing income of approximately

$3,000 for the prior-year period.

The change is immaterial.

loss was approximately $4.5 million for the three-month period ended June 30, 2024, as compared to approximately $1.2 million for the

prior-year period.

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

Results of Operations for the Six Months Ended June 30, 2024 and 2023

and development expenses

and development expenses were approximately $5.7 million for the six-month period ended June 30, 2024, as compared to approximately $1.3

for the prior-year period.

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

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

We expect research and development expenses to marginally increase in 2025 and beyond, primarily due to hiring additional personnel,

as clinical trials for the Glucotrack CBGM;

however, we may adjust or allocate the level of our research and development expenses based

on available financial resources and based on our commercial needs, including the FDA registration process, specific requirements from

customers, development of new Glucotrack CBGM models and others.

expenses were approximately $170,000 for the six-month period ended June 30, 2024, as compared

to $0 for the prior-year period.

This increase is primarily attributable to business development

personnel and professional marketing services.

and administrative expenses

and administrative expenses were approximately $1.5 million for the six-month period ended June 30, 2024, as compared to approximately

$1.2 million for the prior-year period.

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

and administrative expenses consist primarily of professional services, salaries, consulting fees, insurance, travel expenses and other

related expenses for executive, finance and administrative personnel, including stock-based compensation expenses.

Other general and

administrative costs and expenses include facility-related costs not otherwise included in research and development costs and expenses,

and professional fees for legal and accounting services.

income, net was approximately $26,000 for the six-month period ended June 30, 2024, as compared to financing income of approximately

$1,000 for the prior-year period.

The increase is attributable to interest income received during the period.

loss was approximately $2.93 million for the three-month period ended March 31, 2024, as compared to approximately $1.31 million for

the prior-year period.

The increase in net loss is attributable primarily to the increase in our research and development operating

expenses, as described above.

Flows for the Nine Months Ended March 31, 2024 and 2023

cash used in operating activities was approximately $2.94 million and approximately $1.31 million for the three-month periods ended March

loss was approximately $7.4 million for the six-month period ended June 30, 2024, as compared to approximately $2.5 million for the prior-year

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

Flows for the Six Months Ended June 30, 2024 and 2023

cash used in operating activities was approximately $4.8 million and approximately $2.3 million for the six-month periods ended June

30, 2024 and 2023, respectively.

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$7.4 million and approximately $2.5 million, respectively.

cash used in investing activities was $59,000 and $0 for the three-month periods ended March 31, 2024 and 2023, respectively.

used in investing activities primarily reflects the purchasing of fixed assets.

cash used in investing activities was $71,000 and $0 for the six-month periods ended June 30, 2024 and 2023, respectively.

Net cash used

in investing activities primarily reflects the purchasing of fixed assets.

cash provided by financing activities was approximately $580,000 and $8.7 million for the six-month periods ended June 30, 2024 and 2023,

respectively.

Net cash provided by financing activities primarily reflects the proceeds received from private placement transaction in

2024 versus net proceeds received upon completion of public offering.

Sheet Arrangements

of March 31, 2024, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

of June 30, 2024, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

Accounting Policies

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and such differences could be material.

and Capital Resources

date, we have not generated any revenues and have experienced net losses and negative cash flows from our activities.

our incorporation, we have devoted substantially all our resources to research and product development and to providing general and administrative

support for these activities.

Since our incorporation, we have incurred significant losses and negative cash flows from operations.

the three months ended March 31, 2024, we incurred a net loss of approximately $3.0 million and used $2.9 million of cash in our operations.

As of March 31, 2024, we had an accumulated deficit of approximately $112.8 million.

We expect to continue to incur significant and increasing

losses and do not expect positive cash flows from operations for the foreseeable future, and our net losses may fluctuate significantly

from period to period depending on the timing of and expenditures on our research and development activities.

on our operating plans, we do not expect that our current cash and cash equivalents as of March 31, 2024, will be sufficient to fund

our operating, investing, and financing cash flow needs for at least the next twelve months, assuming our programs advance as currently

contemplated.

Based upon this review and our current financial condition, the Company has concluded that substantial doubt exists as

to our ability to continue as a going concern.

We have and believe we will continue to be able to raise additional capital through debt

financing, private or public equity financings, license agreements, collaborative agreements or other arrangements with other companies,

or other sources of financing.

However, there can be no assurances that such financing will be available or will be at terms acceptable

to us, or at all.

If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce, or eliminate

our clinical trials or other operations.

If any of these events occur, our ability to achieve our operational goals would be adversely

Our future capital requirements and the adequacy of available funds will depend on many factors, including those described

in the section titled “Risk Factors.” Depending on the severity and direct impact of these factors on us, we may be unable

to secure additional financing to meet our operating requirements on commercially acceptable terms favorable to us, or at all.

Concern Uncertainty

of December 31, 2023, cash on hand was $1,497,000.

The development and commercialization of non-invasive glucose monitoring devices for

use by people, are expected to require substantial further expenditures.

We remain dependent upon external sources for financing our

Since inception, we have incurred substantial accumulated losses and negative operating cash flow and have a significant

accumulated deficit.

These factors raise substantial doubt about our ability to continue as a going concern.

The financial statements

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

We plan to finance our operations through the

sale of equity (including a shelf registration statement on Form S-3 that was declared effective on September 27, 2021 by the SEC which

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

There can be no assurance that

we will succeed in obtaining the necessary financing to continue our operations.

in April 2024, the Company raised net proceeds of $500,000 through the completion of a private placement transaction.

development of the implantable continuous glucose sensor product is expected to require substantial further expenditures.

We remain dependent

upon external sources for financing our operations.

Since inception, we have incurred substantial accumulated losses and negative operating

cash flow and have a significant accumulated deficit.

We do not have any committed external source of funds or other support for our

development efforts, and we cannot be certain that additional funding will be available on acceptable terms, or at all.

generate sufficient revenue to finance our cash requirements, which we may never do, we expect to finance our future cash needs through

a combination of public or private equity offerings, debt financings, collaborations, government funding, strategic alliances, licensing

arrangements, and other marketing or distribution arrangements, any of which may include terms that may adversely affect our stockholders’

If we are unable to raise additional capital in sufficient amounts or on acceptable terms, we may have to significantly delay,

scale back or discontinue our development or commercialization initiatives.

Any of the above events could significantly harm our business,

prospects, financial condition and results of operations and cause the price of our common stock to decline.

As of June 30, 2024, we

believe that our cash on hand will not provide sufficient working capital to fund its current operations and animal trial program for

the development of its Implantable CGM for a period of twelve-months subsequent to the reporting period.

Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, we are not required to provide the information required by this Item.

required for smaller reporting companies.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis