What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-14 compared with 2024-08-13 · 168 added, 120 removed, 141 unchanged (67% 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 noninvasive glucose monitoring device designed to help people with 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

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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 patients.

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

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

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.

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

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

completed four animal studies with evolving prototype systems, all four of which consistently demonstrated a simple implant

procedure, good functionality, and safety.

The Company has also successfully demonstrated continuous glucose sensing in the

epidural space via two additional animal trials, both of which demonstrated a simple implant procedure, good functionality, and

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

stimulation therapy for their condition.

The results of these animal trials were recently presented in poster form at the American Diabetes Association, the

Diabetes Technology Society, and the DiabetesMine annual conferences.

A regulatory submission has been made for a first in human study.

This will be an acute study intended to demonstrate

device performance and safety.

All preparatory clinical activities are complete and the study is expected to initiate in Q4 2024, pending

regulatory approval.

In parallel, the Company is also preparing for a long-term clinical trial expected to begin in late Q2 2024.

of this effort, the Company is working towards ISO13485 certification, an internationally agreed-upon standard of quality system requirements

for the design, production, distribution, and sale of medical devices.

The Company has successfully completed the first audit and is scheduled

to complete the second audit in December 2024.

A successful second audit results in certification of compliance to the standard, which

is recognized and accepted by the FDA, the European Union, and many other geographies worldwide.

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

Senior Management team includes;

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Technology, a medical research scientist who brings over 25 years of experience in the diabetes industry, including previous senior roles

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, 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

executives joined the Company as senior advisors to the Board.

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

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.

at Dexcom and Medtronic, 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, Senseonics, Abbott Diabetes, and Medtronic Diabetes, Vincent Wong, Vice President of Quality, a medical device professional with 15 years of experience in quality system

for implantable medical device manufacturing with senior roles at Cirtec Medical and TOMZ, and Sandie Martha, Vice President Clinical

Operations, a medical device professional with over 20 years of experience in the medical device and diabetes industry with senior roles

at Dexcom and GlySens.

Balo, formerly of Dexcom and St Jude Medical (now Abbott) and John Ballantyne, founder and formerly of Aldeveron have joined as

independent board members.

Several highly talented and accomplished executives joined the Company as senior advisors to the Board.

These include Daniel McCaffrey MBA MA, a world-renowned behavioral scientist and digital health expert formerly at Samsung Health

and Dexcom, Inc., and Dr.

Klonoff, world renowned endocrinologist and diabetes technology thought leader.

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

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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

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.

The 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 Date”).

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”).

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

July 18, 2024, we entered into a series of convertible promissory notes with certain investors which including three of our directors and one member of our executive management, providing for the private placement

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

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.

(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 year.

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 was not convertible until and the approval at a meeting

of our stockholders.

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.

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

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.

On August 23, 2024, two of the June 27 Investors entered into conversion agreements with us, pursuant to which we

agreed to convert the principal amount, plus any accrued but unpaid interest pursuant to each of the June 27 Notes, totalling approximately

$20,076 each, held by the Investors to Common Stock at a conversion price of $1.02 per share.

On October 15, 2024, we issued 19,682 shares

of common stock for each of the two of the June 27 Investors in respect of each respective debt converted.

In satisfaction of the debt,

we also issued to each of the two June 27 Investors three warrants (each an “August 23 Warrant”).

Each August 23 Warrant becomes

exercisable on August 16, 2025 and has term of 10 years.

The August 23 Warrants are exercisable for cash only and have no price-based

antidilution.

The first August 23 Warrant is for 10,707 shares of Common Stock and is exercisable at $1.875 per share.

The second August

23 Warrant is for 7,648 shares of Common Stock, exercisable at $2.625 per share.

The third August 23 Warrant is for 5,948 shares of Common

Stock, exercisable at $3.375 per share.

On September 5, 2024, one of the June 27 Investors and July 18 Investors entered into a conversion agreement with

us, pursuant to which we agreed to convert outstanding board fees and the principal amount, plus any accrued but unpaid interest pursuant

to the June 27 Investor’s June 27 Note, totalling $259,300, held by the Investor to Common Stock at a conversion price of $1.02

On October 15, 2024, we issued 254,226 shares of common stock for the June 27 Investor in respect of the Debt converted.

satisfaction of the debt, we issued to the July 18 Investor three warrants (each an “September 5 Warrant”).

Each September

5 Warrant becomes exercisable on August 16, 2025 and has term of 10 years.

The September 5 Warrants are exercisable for cash only and

have no price-based antidilution.

The first September 5 Warrant is for 138,299 shares of Common Stock and is exercisable at $1.875 per

The second September 5 Warrant is for 98,785 shares of Common Stock, exercisable at $2.625 per share.

The third September 5 Warrant

is for 76,833 shares of Common Stock, exercisable at $3.375 per share.

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

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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.

the nine months ended September 30, 2024, we incurred a net loss of approximately $12.5 million and used $9.0 million of cash in our

As of September 30, 2024, we had an accumulated deficit of approximately $122.7 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 September 30, 2024, the balance of cash and cash equivalents of approximately $346,000, together with the net proceeds in total

amount of $8,873 which expected to be received upon closing of a public offering through registration statements on Form S-1 on

November 14, 2024, 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 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 June 30, 2024 and 2023

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

September 30, 2024 compared with the same periods ended September 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 September 30, 2024 and 2023

and development expenses

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.

and development expenses were approximately $2.1 million for the three-month period ended September 30, 2024, as compared to approximately

$1.7 million for the prior-year period.

The increase is attributable to ramping up product development actives.

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and other expenses.

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

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

personnel, as well clinical trials for the Glucotrack CBGM;

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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.

expenses were approximately $0.1 million for the three-month period ended September 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 $802,000 for the three-month period ended June 30, 2024, as compared to approximately

$552,000 for the prior-year period.

and administrative expenses were approximately $1.1 million for the three-month period ended September 30, 2024, as compared to approximately

$0.5 million for the prior-year period.

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

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and professional fees for legal and accounting services.

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.

Finance (income)

expenses, net was approximately $1.9 million for the three-month period ended September 30, 2024, as compared to finance income of

approximately $0.001 million for the prior-year period.

This increase was primarily due to $1.5 million in revaluation expenses

incurred from settlement of financial liabilities and $0.3 million in discount amortization and interest expenses.

loss was approximately $5.1 million for the three-month period ended September 30, 2024, as compared to approximately $2.2 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

Results of Operations for the Nine Months Ended September 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.

and development expenses were approximately $7.8 million for the nine-month period ended September 30, 2024, as compared to approximately

$3.0 million 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,

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

as clinical trials for the Glucotrack CBGM;

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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

expenses were approximately $0.3 million for the nine-month period ended September 30, 2024, as compared

to $0 for the prior-year period.

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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 were approximately $2.6 million for the nine-month period ended September

30, 2024, as compared to approximately $1.7 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

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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 $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

(income) expenses, net

expenses, net was approximately $1.8 million for the nine-month period ended September 30, 2024, as compared to finance income, net

of approximately $0.002 million for the prior-year period.

This increase was primarily due to $1.5 million in revaluation expenses

incurred from settlement of financial liabilities and $0.3 million in discount amortization and interest expenses.

loss was approximately $12.5 million for the nine-month period ended September 30, 2024,

as compared to approximately $4.7 million for the prior-year period.

The increase in net loss is attributable primarily to the increase

in our operating expenses, as described above.

Flows for the Nine Months Ended September 30, 2024 and 2023

cash used in operating activities for the nine-month period ended September 30, 2024 was approximately $9.0 million primarily due to

the net loss of approximately $12.5 million offset by non-cash charges of $2.3 million and an increase in working capital excluding cash

of $1.2 million.

Net cash used in operating activities for the nine-month periods ended September 30, 2023 was approximately $4.1 million

primarily due to the net loss of $4.7 million.

cash used in investing activities was $0.1 million and $0 for the nine-month periods ended September 30, 2024 and 2023, respectively.

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

cash provided by financing activities was approximately $5.0 million and $8.7 million for the nine-month periods ended September 30,

2024 and 2023, respectively.

Net cash used in operating activities primarily reflects the net loss for those periods of approximately

$7.4 million and approximately $2.5 million, respectively.

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.

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

of September 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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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.

We believe that our cash on hand as of September 30, 2024, together with

the net proceeds expected to be received upon closing of a public offering through registration statements on Form S-1 on November 14,

2024, 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.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis