Item 1. Business
Item
1. Business
Unless
the context otherwise requires, the terms “we”, “our”, “ours” “us”, “Company”
and “Glucotrack” refer to Glucotrack, Inc., a Delaware corporation.
Overview
The
Company was incorporated on May 18, 2010 under the laws of the State of Delaware. We are a medical device company focused on the development
of an implantable continuous blood glucose monitor (“CBGM”) for persons with Type 1 diabetes and Type 2 diabetes using insulin
or at risk for hypoglycemia (the “Glucotrack CBGM”).
The
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 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 has since rapidly moved away from
point-in-time measurement to continuous measurement, the Company determined in 2023 that it would focus its efforts on developing the
Glucotrack CBGM. As such, the Company withdrew the CE Mark for Glucotrack and are no longer pursuing commercialization of this product
or development of any further iterations.
On
October 7, 2022, the Company acquired certain intellectual property related to the Glucotrack CBGM from Paul V. Goode, the Company’s
Chief Executive Officer and intends to develop the technology to address the growing Type 1 and Type 2 diabetes market.
The
Company is currently developing the Glucotrack CBGM for use by Type 1 diabetes patients as well as Type 2 diabetes using insulin or at
risk for hypoglycemia.. 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. Subsequently we announced that a 3-year longevity is feasible leveraging both in-vitro and in-silico test results. We have also
completed multiple animal studies with initial prototype systems which demonstrated a simple implant procedure with good safety and functionality.
The results of both were presented in poster form at the 2024 American Diabetes Association annual conference. 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.
Further
to the above progress on the Glucotrack CBGM, we have also successfully demonstrated continuous glucose sensing in the epidural space.
This latter approach is of importance for patients with diabetes already contemplating spinal cord stimulation therapy for their condition.
The Company believes this approach may enable integrated chronic disease management with one system that provides dual benefits of pain
relief and glucose monitoring.
The
Company completed a first in human study in 2025. This study was an acute study intended to demonstrate device performance and safety,
as well as safety of the implant and removal procedures. The study used the planned commercial version of the implantable sensor connected
to an externalized prototype electronics device. Patients were monitored in hospital for 4 days. Results of the study were positive,
meeting the endpoints of no serious safety events while demonstrating similar performance and accuracy as observed in longer-term animal
studies. Initial results were presented in poster form at the 2025 Advanced Technologies & Treatments for Diabetes annual meeting
and final results were presented in poster form at the 2025 American Diabetes Association annual conference.
The
Company initiated a long-term, multicenter feasibility study in Australia to evaluate the CBGM product performance and safety. The
first phase of the clinical study provided early product learnings about how the complexity of certain health conditions may impact
study eligibility as well as identified certain product improvements. Following a reassessment of the study in light of planned
product updates and anticipated protocol modifications, the Company determined that continuation of the study in its current
form was no longer practical and elected to close the study.
Consequently, the Company is expediting discussions with the U.S. Food and Drug Administration
(FDA) regarding our planned United States (“U.S.”) clinical trial program that we expect to launch in the second
half of 2026, subject to FDA approval of our Investigational Device Exemption (“IDE”) submission expected to be filed in the second quarter of 2026.
The
Company initially obtained ISO13485 certification in 2024 and successfully passed the 2025 annual audit, both efforts without any
major nonconformities. ISO 13485 is an internationally agreed-upon standard of quality system requirements for the design, production,
distribution, and sale of medical devices. Certification of compliance to the standard is recognized and accepted by the FDA, the European
Medicines Agency (EMA), and many other regulatory authorities worldwide.
4
Our
executive management team consists of our Chief Executive Officer and President, Paul V. Goode PhD, an experienced executive with a 25+
year career developing innovative medical technologies, including at Dexcom, Inc. (“Dexcom”) and MiniMed (now Medtronic Diabetes)
and Chief Financial Officer, Peter C. Wulff, who has 40 years of experience as a chief financial officer and chief operating officer
in both public and private entities. Our senior management team consists of: Mark Tapsak PhD, Chief Scientific Officer, a medical research
scientist who brings over 25 years of experience in the diabetes industry, including previous senior roles at Dexcom and Medtronic; Vincent
Wong, Chief Operating Officer, a medical device professional with over 15 years of experience in operations and quality systems for implantable
medical device manufacturing with senior roles at Cirtec Medical and TOMZ Corporation (“TOMZ”); James P. Thrower PhD, Vice
President of Advanced Technologies, a seasoned engineering executive with 20 years’ experience formerly of Sterling Medical Devices,
Mindray DS USA and Dexcom.; 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, Incorporated, Abbott Diabetes, and Medtronic
Diabetes; 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 Incorporated (“GlySens”); and Ted Williams, Vice President
Regulatory, a medical device professional with over 20 years of experience in the biotech and diabetes industry with a senior role at
GlySens.
Our
Board of Directors (the “Board” or “Board of Directors”) includes the Chairman Luis J. Malavé, formerly
of Insulet Corp, Medtronic and MiniMed (now Medtronic Diabetes); Andy Balo, formerly of Dexcom and St Jude Medical (now Abbott), Erin
Carter, formerly of Medtronic and Boston Scientific; and Victoria Carr-Brendel, formerly of Dexcom, Boston Scientific, JenaValve Technology,
and Advanced Bionics.
Market
Opportunity
Diabetes
Diabetes
is a chronic, life-threatening disease for which there is no known cure. Diabetes is caused by the body’s inability to produce
or effectively utilize the hormone insulin. This inability prevents the body from adequately regulating blood glucose levels. Glucose,
the primary source of energy for cells, must be maintained at certain concentrations in the blood in order to permit optimal cell function
and health. Normally, the pancreas provides control of blood glucose levels by secreting the hormone insulin to decrease blood glucose
levels when concentrations are too high. In people with diabetes, blood glucose levels fluctuate between very high levels, a condition
known as hyperglycemia, and very low levels, a condition known as hypoglycemia. Hyperglycemia can lead to serious long-term complications,
such as blindness, kidney disease, nervous system disease, amputations, stroke and cardiovascular disease. Hypoglycemia can lead to confusion,
loss of consciousness or death.
Diabetes
is typically classified into two major groups: Type 1 and Type 2. Type 1 diabetes is characterized by the body’s inability to produce
insulin, resulting from destruction of the insulin producing cells of the pancreas. Individuals with Type 1 diabetes must rely on frequent
insulin injections in order to regulate and maintain blood glucose levels. Type 1 diabetes is frequently diagnosed during childhood or
adolescence, although disease onset can occur at any age. Type 2 diabetes, the more common form of diabetes, is a metabolic disorder
that is characterized by the body’s inability to either properly utilize insulin or produce enough insulin. Type 2 diabetes is
associated with older age, obesity, family history of diabetes, history of gestational diabetes, impaired glucose metabolism, physical
inactivity and race or ethnicity. Depending on the severity of Type 2 diabetes, individuals may require diet and nutrition management,
exercise, oral medications or insulin injections to regulate blood glucose levels.
According
to the Diabetes Atlas (Eleventh Edition) published by the International Diabetes Federation in 2025, approximately 589 million adults
worldwide, between the ages of 20 and 79, or approximately 10% of the world’s adult population, were estimated to suffer from diabetes
in 2025 (not including those persons who suffer from impaired glucose tolerance or gestational diabetes, diabetic conditions first arising
during pregnancy). The International Diabetes Federation estimates that this number will grow to approximately 853 million adults worldwide
by 2045. The Centers for Disease Control and Prevention in its 2025 National Diabetes Statistics Report provided crude estimates for
2021 that there are approximately 40.1 million people with diabetes in the U.S., of which 29.1 million have diagnosed diabetes. Among
US adults ages 18 years or older, there were 1.5 million new cases of diabetes diagnosed in 2023.
5
Glucose
Monitoring
Blood
glucose levels can be affected by many factors, including the carbohydrate and fat content of meals, exercise, stress, illness or impending
illness, hormonal releases, medications, variability in insulin absorption and changes in the effects of insulin in the body. Given the
many factors that affect blood glucose levels, maintaining glucose within a normal range can be difficult. People with diabetes generally
manage their blood glucose levels by administering insulin or ingesting carbohydrates throughout the day to maintain blood glucose within
normal ranges. Normal ranges vary from person to person. In order to maintain blood glucose levels within normal ranges, people with
diabetes must first measure their blood glucose levels so that they can make the proper therapeutic adjustments. As adjustments are made,
additional blood glucose measurements may be necessary to gauge the individual’s response to the adjustments. More frequent testing
of blood glucose levels provides these individuals with information that can be used to better understand and manage their diabetes.
Testing of blood glucose levels should be performed (at a minimum) before meals, after meals and before going to sleep. People with diabetes
who take insulin usually need to test more often than those who do not take insulin.
Until
recently, spot finger stick devices known as blood glucose monitors (“BGM”) have been the most prevalent devices for blood
glucose monitoring. These devices require users to insert a strip into a glucose meter, take a blood sample with a finger stick and place
a drop of blood on a test strip that yields a single point in time blood glucose measurement. Despite continued developments in the field
of BGMs, the routine measurement of glucose levels remains invasive, painful, inconvenient, difficult and costly. Moreover, the American
Diabetes Association updated guidelines (released 2023) indicated there is no clinical evidence of benefit for non-insulin using Type
2 diabetes patients; and recommended CGM as the standard of care for those patients.
Continuous
glucose monitor (“CGM”) systems involve the insertion of sensors into the body to measure glucose levels in the interstitial
fluid throughout the day and night, providing real-time data that shows trends in glucose measurements. Many published clinical studies
demonstrate that CGMs improve glycemic control in people with Type 1 diabetes or people with insulin-requiring Type 2 diabetes. As a
result, CGM use is rapidly increasing and has become the clinically recommended standard of care for these patients.
Despite
the benefits in glycemic control and significant insurance coverage, almost half of the people with diabetes still have not adopted CGM.
We believe that a significant market opportunity exists for an innovative CGM device that addresses the remaining barriers to adoption.
According to a 2017 Diabetes Care study, these barriers include the inconvenience of wearing devices all the time, discomfort and inconvenience
of bi-weekly device replacement, dislike for having diabetes devices on the body, and dislike for how diabetes devices look on the body.
Additionally, the study reported that reasons that people discontinued using a CGM included the device being uncomfortable or painful
and the belief that the device is not accurate. The Company believes that improved CGM devices that address these barriers could provide
significant benefits to patients, healthcare providers and payors, thereby increasing overall CGM adoption and ongoing satisfaction.
The Company conducted its own market research studies in 2024 and 2025 to validate its belief that these findings are still relevant.
The results on over 1,500 patients demonstrated that patients with diabetes still have the same issues as expressed in 2017 and that interest
in a long-term, fully implantable CBGM is high. The Company is developing a long-term CBGM that will allow continuous monitoring of blood
glucose levels, which the Company believes is a significant improvement in quality compared to spot finger stick devices and CGM.
6
Our
Product
The
Company is currently developing a long-term implantable CBGM with no requirement for an additional wearable component with minimal calibration
(the “Glucotrack CBGM”). The Glucotrack CBGM utilizes an intravascular approach, in which the device is implanted subcutaneously
and connected to a lead that is placed directly into a blood vessel. This facilitates continuous blood glucose measurements with effectively
zero lag time. In comparison, commercially-available CGM systems measure glucose in the interstitial fluid, which lags behind blood glucose.
Our approach is based on design elements, implant techniques, and implant tools commonly used for active implantable devices in the cardiovascular
space. As a result, it employs a recognized, established, and widely utilized implant procedure and device form factor.
In
2023, we completed the laboratory-based feasibility study demonstrating that the CBGM sensor is capable of measuring glucose for at least
two years post-implant. By the end of 2023 we completed our initial preclinical in vivo animal study. This initial preclinical study
produced very strong results, demonstrating at least three months of well-sustained sensor life while also demonstrating that the sensor
is safe for animals. The study also indicated the CBGM is capable of a high level of measurement accuracy as compared with conventional
CGM technologies on the market. Since 2023, we have completed three additional preclinical animal studies for our CBGM sensor, demonstrating
performance and accuracy up to six months.
By
the end of 2023, we initiated a human clinical device/system design and development program. The program outsourced development and manufacturing
to respective contract design and contract manufacturing organizations. Since then, we have developed a dual supply source for both implantable
system components (the electronics assembly and the sensor lead), both of which are ISO 13485 certified with dedicated experience in
manufacturing active implantable medical devices. Both organizations have since manufactured products used in various Glucotrack pre-clinical
bench and animal studies, as well products used in both our human clinical trials.
Also
in 2024, we worked with The Technology Partnership, or “TTP” (Cambridge, UK) to demonstrate a sensor longevity of 3 years.
Using in silico modeling to iterate membrane parameter design changes, and further validated by in vitro bench testing, we were able
to improve our projected sensor longevity from 2 years to 3 years. Since then, we have worked with TTP to migrate sensor chemistry into
a production environment under ISO 13485 certification.
In
2024, we announced that the Glucotrack CBGM successfully completed a 60-day long-term preclinical study on measuring glucose in the epidural
space. The Glucotrack CBGM sensor, implanted in the epidural space of animals, closely tracked both blood glucose and a commercially
available subcutaneous CGM throughout the 60-day period. The implantation procedure took approximately 20 minutes, and the animals recovered
without complications. No abnormal clinical signs were observed throughout the study period, and no abnormal findings were observed in
the spinal cord or surrounding tissues during post-explant analysis. The study also confirmed that the implanted sensor did not cause
any delayed latent effects over the long-term period, which is particularly important as a complete healing process in animal studies
with implanted devices may take several weeks. With the completion of this study, the durability of the epidural approach for continuous
glucose monitoring has now been confirmed over the 60-day period. The Company is currently working with a renowned neuromodulation physician
to evaluate a clinical development program to further advance the medical application of this technology.
In
late 2024, we initiated an acute (5 day) FIH study for a prototype version of our CBGM in Sao Paulo, Brazil. The clinical trial
evaluated the CBGM sensor technology in a cohort of 8 in-hospital patients. The goals of the study were to prove the implant and
removal procedures were safe and reasonable, the device was safe and functional, and the overall experience was well-tolerated. The
study was completed in early 2025 and successfully met all objectives.
In
late 2025, the Company initiated a clinical study outside the United States to evaluate the CBGM product performance and safety. The
first phase of the clinical study provided early learnings about how the complexity of certain health conditions may impact study eligibility
as well as identified certain product improvements. Based on these findings, the Company plans to continue its clinical program with
protocol amendments. These learnings have been incorporated into the Company’s ongoing discussions with the FDA regarding the U.S. clinical study program. In the first half of 2026, the Company intends to advance these discussions
and reprioritize its clinical activities to place greater emphasis on the U.S. clinical study program.
Since
second quarter 2025, the Company has been in discussions with the FDA through the presub process and preparing for an Investigational
Device Exemption (“IDE”) submission in the second quarter of 2026. The presub discussions pertain to the protocol study design and
related requirements to secure IDE approval for the initial Feasibility Study and future long-term human clinical trials in the United
States. In anticipation of the IDE approval for the Feasibility Study, the Company has identified and is collaborating with a respected
physician investigator and medical institution well known for conducting CGM studies.
In
early 2025, we received ISO 13485:2016 certification from the British Standards Institute (“BSI”). This verified the Company
has established, and is maintaining, a quality management system that meets all requirements of the ISO 13485:2016 standard for design
and development of our products. The Company had the annual compliance audit in late 2025 and was found to be in compliance with no major
findings.
7
Research
and Development
See
“ Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operation – Results of
Operation ” below for a discussion of the research and development expenses for the fiscal years ended December 31, 2025 and
2024.
Regulatory
Considerations
Healthcare
is heavily regulated by federal, state and local governments in the United States, and by similar authorities in other countries. Any
product that we develop must receive all relevant regulatory approvals or clearances, as the case may be, before it may be marketed in
a particular country. The laws and regulations affecting healthcare change regularly, thereby increasing the uncertainty and risk associated
with any healthcare related venture. The United States government has in the past considered, is currently considering and may in the
future consider healthcare policies and proposals intended to curb rising healthcare costs, including those that could significantly
and adversely affect reimbursement for healthcare products such as our devices. These policies have included and may in the future include:
basing reimbursement policies and rates on clinical outcomes, the comparative effectiveness and costs of different treatment technologies
and modalities; imposing price controls and taxes on medical device providers; and other measures. Future significant changes in the
healthcare systems in any jurisdiction in which our devices may be cleared for sale could also have a negative impact on the demand
for our devices. These include changes that may reduce reimbursement or payment rates for such products.
In
the United States, the federal government regulates healthcare through various agencies, including but not limited to the following:
(i) the FDA, which administers the Food, Drug, and Cosmetic Act (the “FDCA”) as well as other relevant laws; (ii) the Centers
for Medicare & Medicaid Services (“CMS”), which administers the Medicare and Medicaid programs; (iii) the Office of Inspector
General, which enforces various laws aimed at curtailing fraudulent or abusive practices including, by way of example, the Anti-Kickback
Law, the Anti-Physician Referral Law, commonly referred to as the Stark Law, the Anti-Inducement Law, the Civil Money Penalty Law, and
the laws that authorize the Office of Inspector General to exclude health care providers and others from participating in federal healthcare
programs; and (iv) the Office of Civil Rights which administers the privacy and security aspects of the Health Insurance Portability
and Accountability Act of 1996 (“HIPAA”). All of the aforementioned are agencies within the Department of Health and Human
Services. Healthcare is also provided or regulated, as the case may be, by the Department of Defense through its TriCare program, the
Department of Veterans Affairs under, among other laws, the Veterans Health Care Act of 1992, the Public Health Service within the Department
of Health and Human Services under the Public Health Service Act, the Department of Justice through the federal False Claims Act (the
“FCA”) and various criminal statutes, and state governments under the Medicaid program and their internal laws regulating
all healthcare activities. If and when we receive FDA approval to market our devices in the United States, we will be subject to regulation
by some or all of the foregoing agencies.
The
applicable regulatory schemes in the EU are significantly more diverse than those in the United States and do not lend themselves to
similar summary. Although the CE Mark system and the Medical Device Regulation (“MDR”) require a minimum level of harmonization
in the EU, each EU member country may impose additional regulatory requirements. Because there are numerous EU member countries with
distinct legal systems, the scope of potential regulatory requirements in each of the EU countries (additional to the harmonized EU requirements)
is difficult to summarize or predict.
Regulation
of the Design, Manufacture and Distribution of Medical Devices
Any
product that we develop must receive all relevant regulatory clearances or approvals, as the case may be, before it may be marketed in
a particular country.
Sales
of medical devices outside the United States are subject to foreign regulatory requirements that vary widely from country to country.
These laws and regulations range from simple product registration requirements in some countries to complex clearance and production
controls in others. As a result, the processes and time periods required to obtain foreign marketing approval may be longer or shorter
than those necessary to obtain FDA approval (as described below). These differences may affect the efficiency and timeliness of international
market introduction of our devices. For countries in the EU, medical devices must display a CE Mark before they may be imported or sold
and must comply with the requirements of the MDR. However, although the MDR is applicable throughout the EU, in practice it does not
ensure uniform regulation throughout the EU. Rather, the MDR requires only a minimum level of harmonization in the EU. Accordingly, member
countries may apply and enforce the MDR’s terms differently, and certain EU member countries may request or require performance
and/or safety data in addition to the MDR’s requirements from time to time, on a case-by-case basis. The CE Mark also permits the
sale in countries that have an MDR Mutual Recognition Agreement with the EU.
8
In
the United States, under Section 201(h) of the FDCA, a medical device is an article which, among other things, is intended for use in
the diagnosis of disease or other conditions or in the cure, mitigation, treatment or prevention of disease in man or other animals.
We believe that our devices will be classified as medical devices and subject to regulation by numerous agencies and legislative bodies,
including the FDA and its foreign counterparts. Devices are subject to varying levels of regulatory control, the most comprehensive of
which requires that a clinical evaluation be conducted before a device receives approval for commercial distribution. The FDA classifies
medical devices into one of three classes. Class I devices are relatively simple and can be manufactured and distributed with general
controls. Class II devices are somewhat more complex and require greater scrutiny. Class III devices are new and frequently help sustain
life.
In
the United States, a company generally can obtain permission to distribute a new device in two ways – through a so-called “510(k)”
premarket notification application or through a Section 515 premarket approval (“PMA”) application. The 510(k) submission
applies to any device that is substantially equivalent to a device first marketed prior to May 28, 1976 or to another device marketed
after that date, but which was substantially equivalent to a pre-May 28, 1976 device. These devices are either Class I or Class II devices.
Under the 510(k) submission process, the FDA will issue an order finding substantial equivalence to a predicate device (pre-May 28, 1976
or post-May 28, 1976 device that was substantially equivalent to a pre- May 28, 1976 device) and permitting commercial distribution of
that device for its intended use. A 510(k) submission must provide information supporting its claim of substantial equivalence to the
predicate device. The FDA permits certain low risk medical devices to be marketed without requiring the manufacturer to submit a premarket
notification. In other instances, the FDA may require that a premarket notification not only be submitted, but also be accompanied by
clinical data. If clinical data from human experiments are required to support the 510(k) submissions, these data must be gathered in
compliance with investigational device exemption regulations for investigations performed in the United States. The FDA review process
for premarket notifications submitted pursuant to section 510(k) should take about 90 days, but it can take substantially longer if the
FDA has concerns, and there is no guarantee that the FDA will clear the device for marketing, in which case the device cannot be lawfully
distributed in the United States. If the FDA finds that the device subject to the premarket notification is substantially equivalent
to a proper predicate device, then the FDA may “clear” that device for marketing. These devices are not “approved”
by the FDA. It is very unlikely, however, that the FDA will deem our Glucotrack CBGM subject to the 510(k) process, as opposed to the
more time-consuming, resource intensive and problematic PMA application process described below.
The
more comprehensive PMA process applies to a new device that either is not substantially equivalent to a pre-May 28, 1976 product or is
to be used in supporting or sustaining life or preventing impairment. These devices are normally Class III devices and can only be marketed
following approval of a PMA application. For example, most implantable devices are subject to the PMA approval process. Two steps of
FDA approval generally are required before a company can market a product in the U.S. that is subject to Section 515 PMA approval, as
compared to a Section 510(k) clearance. First, a company must comply with investigational device exemption regulations in connection
with any human clinical investigation of the device; however, those regulations permit a company to undertake a clinical study of a “non-significant
risk” device without formal FDA approval. Prior express FDA approval is required if the device is a significant risk device. If
there is any doubt as to whether a device is a “non-significant risk” device, companies normally seek prior approval from
the FDA. Normally, clinical studies of new diagnostic products are conducted in tandem with a cleared or approved device and treatment
decisions are based on the results from the existing diagnostic device. In such a setting, the FDA may consider the clinical trial as
one not posing a significant risk. However, FDA action is always uncertain and dependent on the contours of the design of the clinical
trial and the device and there is no assurance that the FDA would consider any proposed clinical trial as one posing a non-significant
risk. Moreover, before undertaking any clinical trial, the company sponsoring the trial and the investigator conducting the trial are
required by federal law to seek and obtain the approval of institutional review boards (“IRB”). An IRB weighs the risks and
benefits of a proposed trial to ensure that the human subjects are not exposed to unnecessary risk and reviews the informed consent form
to ensure that it meets federal requirements and accurately describes the risks and benefits, if any, of the clinical trial. IRB review
occurs annually, and annual re-approval is required. University medical centers as well as other entities maintain and operate IRB. Second,
the FDA must review a company’s PMA, which contains, among other things, clinical information acquired under the investigational
device exemption. The FDA will approve the PMA if it finds there is reasonable assurance that the device is safe and effective for its
intended use. The premarket approval process takes substantially longer than the 510(k) process.
9
The
Glucotrack CBGM is still under development and has not yet been approved for commercial sale in or outside the United States. Given
the implantable nature of our CBGM, it is most likely that the device will be assigned a Class III designation which commonly
requires the PMA process for regulatory approval. However, in discussions with the FDA, the Company believes it can file under a De
Novo 510k process provided it meets interoperable Continuous Glucose Monitor (“iCGM”) requirements. The clinical trial rigor necessary to meet this is the same as that for a PMA,
but the benefits of a 510k classification are impactful post-clearance.
Even
when a clinical study has been approved or cleared by the FDA or a notified body or deemed approved, the study is subject to factors
beyond a manufacturer’s control, including, but not limited to the fact that the IRB at a given clinical site might not approve
the study, might decline to renew approval which is required annually, or might suspend or terminate the study before the study has been
completed. Also, the interim results of a study may not be satisfactory, in which case the sponsor may terminate or suspend the study
on its own initiative or the FDA or a notified body may terminate or suspend the study. There is no assurance that a clinical study at
any given site will progress as anticipated; there may be an insufficient number of patients who qualify for the study or who agree to
participate in the study, or the investigator at the site may have priorities other than the study. Also, there can be no assurance that
the clinical study will provide sufficient evidence to assure the FDA or a notified body that the product is safe and effective, a prerequisite
for FDA approval of a PMA. Even if the FDA or a notified body approves or clears a device, it may limit its intended uses in such a way
that manufacturing and distributing the device may not be commercially feasible.
After
approval to market is given, the FDA and foreign regulatory agencies, upon the occurrence of certain events, are authorized under various
circumstances to withdraw the clearance or approval or require changes to a device, its manufacturing process or its labeling or additional
proof that regulatory requirements have been met.
A
manufacturer of a device approved through the PMA process is not permitted to make changes to the device which affects its safety or
effectiveness without first submitting a supplement application to its PMA and obtaining FDA approval for that supplement. In some instances,
the FDA may require clinical trials to support a supplement application. Any change in the intended uses of a PMA device or a 510(k)
device requires an approval supplement. Exported devices are subject to the regulatory requirements of each country to which the device
is exported, as well as certain FDA export requirements.
The
Company plans to leverage the De Novo clinical trial data, if successful, along with the associated development and manufacturing information,
for CE Mark certification. The Company will choose a notified body and submit via the MDR regulations to obtain this necessary clearance
for marketing in EU member states. Upon approval, if granted, the Company may consider alternative markets that can leverage both the
FDA and CE Mark approvals.
10
Reimbursement
Considerations
In
the U.S. market, coverage and reimbursement from Medicare, Medicaid or other governmental healthcare programs or systems, and private
third-party healthcare payors is critical to the success of a medical device company. CGM systems have been broadly accepted by Medicare
and commercial third-party payors. Currently, Medicare covers CGM systems, which includes supplies necessary for the use of the device
under the Durable Medical Equipment (DME), benefit category. Previously, Medicare coverage for CGM was only available to Medicare patients
who take at least three doses of insulin a day. The Local Coverage Determination (LCD), that the Medicare Administrative Contractors
(MACs) released in April 2023 extended Medicare CGM coverage to all patients using insulin. The LCD also allows coverage for patients
not taking insulin if the patient has a history of problematic hypoglycemia.
There
is currently one commercially available implantable CGM product and the current reimbursement landscape includes coverage for the product
itself, coverage for the implantation process and coverage for the removal and reinsertion process. Additionally, an LCD was recently
released (NGS ICGM LCD - Effective 4/1/2024) allowing for expanded access of this product to include all people with diabetes using insulin,
removing the previous requirement for at least three doses of insulin a day. Like non-implantable CGM, the LCD also allows coverage for
patients not taking insulin if the patient has a history of problematic hypoglycemia.
Even
though CGM coverage is broad, we anticipate that sales volumes and prices of the Glucotrack CBGM will depend in large part on the availability
of adequate reimbursement from Medicare and third-party payors. Medicare reimburses medical devices in a variety of ways depending on
where and how the device is used. However, Medicare only provides reimbursement if CMS determines that the device should be covered and
that the use of the device is consistent with the coverage criteria. A coverage determination can be made at the national level by CMS
or at the local level by the Medicare administrative contractor (formerly called carriers and fiscal intermediaries) or a private contractor
that processes and pays claims on behalf of CMS for the geographic area where the services were rendered. Obtaining a coverage determination,
whether local or national, is a time-consuming, expensive and highly uncertain proposition, especially for a new technology, and inconsistent
local determinations are possible. Our inability to obtain a favorable coverage determination for our CBGM product may adversely affect
our ability to market the product and thus, the commercial viability of the product.
Additionally,
we believe that the overall escalating cost of medical products and services has led to and will continue to lead to increased pressures
on the healthcare industry to reduce the costs of products and services. There can be no assurance that third-party reimbursement and
coverage will be available or adequate, or that future legislation, regulation, or reimbursement policies of third-party payors will
not adversely affect the demand for our products or our ability to sell these products on a profitable basis. The unavailability or inadequacy
of third-party payor coverage or reimbursement could have a material adverse effect on our business, operating results, and financial
condition. Until adequate reimbursement or insurance coverage is established, patients may have to bear the financial cost of our products.
To
mitigate these risks, we are starting our reimbursement planning process early, well in advance of obtaining regulatory approval. We
have engaged a leading reimbursement consultant to complete an initial analysis of the current landscape for CGM technologies. Additionally,
since our product is an implantable device and very similar in form factor and procedure to commercially available cardiovascular devices,
we are also assessing the current reimbursement landscape for those technologies. This will enable us to craft a reimbursement strategy
that is best suited to our Glucotrack CBGM and reflects the different healthcare providers that may be involved in utilizing the product.
Our
reimbursement strategy also incorporates coverage for the product, the implantation procedure, and the removal and reinsertion procedures.
While we are proactively preparing our reimbursement strategy, some activities such as coding applications, if needed, may not be executed
until FDA approval is obtained.
Outside
the United States, availability of reimbursement from third parties varies widely from country to country. Within the EU member countries,
healthcare reimbursement, coverage regulations, and systems differ significantly. An EU reimbursement analysis and strategy may begin
if and when we decide to enter the EU market.
11
Anti-Fraud
and Abuse Rule
There
are extensive United States federal and state laws and regulations prohibiting fraud and abuse in the healthcare industry that can result
in significant criminal and civil penalties that can materially affect us, if and when we receive FDA approval to market our products
in the United States. These federal laws include, by way of example, the following:
●
The
anti-kickback statute (Section 1128B(b) of the Social Security Act), which prohibits certain business practices and relationships
that might affect the provision and cost of healthcare services reimbursable under Medicare, Medicaid and other federal healthcare
programs, including the payment or receipt of remuneration for the referral of patients whose care will be paid by Medicare or other
governmental programs;
●
The
physician self-referral prohibition (Ethics in Patient Referral Act of 1989, as amended, commonly referred to as the Stark Law, Section
1877 of the Social Security Act), which prohibits referrals by physicians of Medicare or Medicaid patients to providers of a broad
range of designated healthcare services in which the physicians (or their immediate family members) have ownership interests or with
which they have certain other financial arrangements;
●
The
anti-inducement provisions of the Civil Monetary Penalties Law (Section 1128A(a)(5) of the Social Security Act), which prohibit providers
from offering anything to a Medicare or Medicaid beneficiary to induce that beneficiary to use items or services covered by either
program;
●
The
FCA (31 U.S.C. § 3729 et seq.), which prohibits any person from knowingly presenting or causing to be presented false or fraudulent
claims for payment to the federal government (including the Medicare and Medicaid programs); and
●
The
Civil Monetary Penalties Law (Section 1128A of the Social Security Act), which authorizes the United States Department of Health
and Human Services to impose civil penalties administratively for fraudulent or abusive acts.
Sanctions
for violating these federal laws include criminal and civil penalties that range from punitive sanctions, damage assessments, monetary
penalties, imprisonment and/or denial of Medicare and Medicaid payments or exclusion from the Medicare and Medicaid programs, or both.
These laws also impose an affirmative duty on those receiving Medicare or Medicaid funding to ensure that they do not employ or contract
with persons excluded from the Medicare and other government programs.
Many
states have adopted or are considering legislative proposals similar to the federal fraud and abuse laws, some of which extend beyond
the Medicare and Medicaid programs, to prohibit the payment or receipt of remuneration for the referral of patients and physician self-referrals
regardless of whether the service was reimbursed by Medicare or Medicaid. Many states have also adopted or are considering legislative
proposals to increase patient protections, such as limiting the use and disclosure of patient specific health information. These state
laws also impose criminal and civil penalties similar to the federal laws.
Similarly,
the EU and EU member countries may have similar fraud and abuse laws which would regulate our business in those jurisdictions. However,
given the diversity of legal systems within the EU, it is difficult to predict with specificity what anti-fraud legislation and regulations
may be implemented and the penalties that they impose.
In
the ordinary course of their business, medical device manufacturers and suppliers have been and are subject regularly to inquiries, investigations
and audits by federal and state agencies that oversee these laws and regulations. Recent federal and state legislation has greatly increased
funding for investigations and enforcement actions, which have increased dramatically over the past several years. This trend is expected
to continue. Private enforcement of healthcare fraud also has increased due in large part to amendments to the civil FCA that were designed
to encourage private persons to sue on behalf of the government. These whistleblower suits by private persons, known as qui tam relators,
may be filed by almost anyone, including present and former patients or nurses and other employees, as well as competitors. HIPAA, in
addition to its privacy provisions, created a series of new healthcare-related crimes.
As
federal and state budget pressures continue, federal and state administrative agencies may also continue to escalate investigation and
enforcement efforts to root out waste and to control fraud and abuse in governmental healthcare programs. A violation of any of these
federal and state fraud and abuse laws and regulations could have a material adverse effect on a supplier’s liquidity and financial
condition. An investigation into the use of a device by physicians may dissuade physicians from recommending that their patients use
the device. This could have a material adverse effect on our ability to commercialize our products.
12
The
Privacy Provisions of HIPAA
In
the United States, HIPAA, among other things, protects the privacy and security of individually identifiable health information by limiting
its use and disclosure. HIPAA directly regulates “covered entities,” such as healthcare providers, insurers and clearinghouses,
and regulates “business associates,” with respect to the privacy of patients’ medical information. All entities that
receive and process protected health information are required to adopt certain procedures to safeguard the security of that information.
It is uncertain whether we would be deemed to be a covered entity under HIPAA and, owing to changes in the law, it is uncertain, based
on our current business model, whether we would be a business associate. Nevertheless, we will likely be contractually required to physically
safeguard the integrity and security of any patient information that we receive, store, create or transmit in the United States. If we
fail to adhere to our contractual commitments, then our physician, hospital or insurance customers may be subject to civil monetary penalties,
which could adversely affect our ability to market our devices. Changes in the law wrought by the provisions of Health Information Technology
for Economic and Clinical Health (“HITECH”) Act, enacted as part of the American Recovery and Reinvestment Act of 2009 (“ARRA”),
increase the duties of business associates and covered entities with respect to protected health information that thereby subject them
to direct government regulation, increasing its compliance costs and exposure to civil monetary penalties and other government sanctions.
While HITECH does not alter the definition of a business associate, it makes it more likely that covered entities with whom we are likely
to do business in the United States, if and when we receive FDA approval to market the Glucotrack CBGM in the United States, will require
us to enter into business associate agreements.
Intellectual
Property
We
are pursuing a proactive intellectual property strategy, which includes patent filings in multiple jurisdictions, including the United
States and other commercially significant markets. We understand the importance of obtaining patent and trade secret protection for new
technologies, products and processes. Our success will depend in large part on our ability to file for and obtain patent protection of
our principal products and procedures, to defend existing or future patents, to maintain trade secrets and to operate without infringing
upon the proprietary rights of others.
As
of December 31, 2025, the Company has strengthened its patent portfolio with the issuance of three U.S. patents:
● U.S.
Patent No. 12,453,494, Methods and Systems for Measuring Glucose Having Improved Decay Rates and Lag Times (issued October 28, 2025).
This patent covers methods and system architectures for implantable glucose sensing that address signal decay and response lag over time.
The claims relate to sensor configurations, control strategies, and data-processing approaches intended to improve temporal response
characteristics and signal stability during long-term glucose monitoring.
● U.S.
Patent No. 12,458,257, Implantable Glucose Sensors and Methods of Glucose Measurement Configured for Minimal Sensor Surface Obstruction
(issued November 4, 2025). This patent covers implantable glucose sensor designs and related measurement methods that reduce functional
impairment caused by surface obstruction or fouling. The claims focus on structural, material, and interface features intended to preserve
sensor performance in vivo by mitigating the effects of tissue interaction and biological accumulation at the sensor surface.
● U.S.
Patent No. 12,458,258, Low Power Implantable Glucose Sensors and Methods of Glucose Measurement (issued November 4, 2025). This patent
covers implantable glucose sensing systems and operational methods designed to reduce power consumption while maintaining measurement
functionality. The claims relate to low-power sensor architectures, measurement strategies, and system-level approaches intended to support
extended operational lifetimes in implantable glucose monitoring applications.
The
three U.S. patents described above resulted from the prosecution of previously filed and previously disclosed patent applications that
were converted to issued patents in 2025. In addition to these issued patents, the Company filed one U.S. utility patent application,
one U.S. continuation application and one U.S. provisional application. The Company may evaluate additional patent filings from time
to time as its technology development progresses.
13
In
2025, one related international patent application has been published:
● WO
2025/193719 A1, Systems and Methods for Integrated Spinal Cord Stimulation and Glucose Monitoring (published September 18, 2025).
We
have trademark registrations for Glucotrack® in the U.S. and Europe and various other jurisdictions.
We
believe that our intellectual property and products do not and will not infringe patents or violate proprietary rights of others, although
it is possible that our existing patent rights may not be valid or that infringement of existing or future patents or proprietary rights
may occur. Litigation may be necessary to defend or enforce our patent rights or to determine the scope and validity of the proprietary
rights of others. Defense and enforcement of patent claims can be expensive and time consuming, even in those instances in which the
outcome is favorable and could result in the diversion of substantial resources and management time and attention from our other activities.
An adverse outcome could subject us to significant liability to third parties, require us to obtain licenses from third parties, require
us to alter our products or processes, or require that we cease altogether any related research and development activities or product
sales.
Patent
protection is highly uncertain and involves complex legal and factual questions and issues. The patent application and issuance process
can be expected to take several years and entails considerable expense. There can be no assurance that patents will be issued as a result
of any applications or that any patents resulting from such applications, or our existing patents will be sufficiently broad to afford
protection against competitors with similar or competing technology. Patents that we obtain may be challenged, invalidated or circumvented,
or the rights granted under such patents may not provide us with any competitive advantages.
Competition
The
market for CGM devices is intensely competitive, subject to rapid change and significantly affected by new product introductions. Three
companies, Abbott Laboratories (“Abbott”), DexCom and Medtronic currently account for substantially all of the worldwide
sales of CGM systems. These products are all transcutaneous systems with sensor longevities of 7-15 days. These systems have a sensor
that is worn on the back of the upper arm or the abdomen, depending on the system. The sensor measures glucose in the interstitial fluid,
which lags glucose in the blood, so the CGM readings may lag about 15-20 minutes behind blood glucose readings. Depending on the system,
the sensor provides glucose readings every one to five minutes and streams directly to the users’ compatible smartphone. Following
the insertion of a new Abbott FreeStyle Libre 3 or DexCom G7 sensor, there is a warm-up period of 30-60 minutes, depending on the system,
during which time no readings are available. After that period, both systems are factory-calibrated, which means that no fingersticks
(blood glucose measurements using a glucometer) are required for calibration. For the Medtronic Guardian 4 system, there is a 2-hour
warm-up period; after that period, no fingersticks are required for calibration when using as a part of the MiniMed 780G insulin pump
system.
There
is currently one implantable CGM that is commercially available in the US and Europe: Senseonics Holdings, Inc. The sensor is inserted
by a doctor under the skin of the upper arm and lasts up to 365 days. The wearable smart transmitter provides on-body vibe alerts and
is worn over the sensor using a daily adhesive. There is a 24-hour warm up period with this system and, after that period, fingersticks
are required for calibration twice a day for the 1st 21 days and then once daily. Similar to the transcutaneous systems, this system
also measures glucose in the interstitial fluid. All four competitors are either publicly traded or are divisions of publicly traded
companies, and they enjoy several competitive advantages, including:
●
significantly
greater name recognition;
●
established
relations with healthcare professionals, customers and third-party payors;
●
established
distribution networks;
●
additional
lines of products, and the ability to offer rebates or bundle products to offer higher discounts or incentives to gain a competitive
advantage;
●
greater
experience in conducting research and development, manufacturing, clinical trials, obtaining regulatory approval for products and
marketing approved products; and
●
greater
financial and human resources for product development, sales and marketing, and patent litigation.
14
As
a result, we cannot ensure that we will be able to compete effectively against these companies or their products.
There
are several new and smaller players that have obtained clearance to market in EU or Asia. Their systems are transcutaneous systems with
similar form factors and longevity as the Abbott, DexCom and Medtronic systems. None of these companies has yet achieved a significant
user base.
Additionally,
Medtronic and other companies have developed or are developing, insulin pumps integrated with CGM systems that provide, among other things,
the ability to suspend insulin administration while the user’s glucose levels are low and to automate basal or bolus insulin dosing.
Both Abbott and DexCom have received FDA clearance to integrate certain versions of their sensors into automated insulin delivery systems.
Although
we face potential competition from many different sources, we believe that our technology, experience and scientific knowledge provide
us with competitive advantages of accuracy, longevity, discretion and usability, though our technology is not in any way integrated with
an automatic insulin delivery system.
Corporate
Information
Our
principal offices are located at 301 17 North, Suite 800, Rutherford NJ 07070, and our telephone number is 201-842-7715. Our website
address is http://www.glucotrack.com; the reference to such website address does not constitute incorporation by reference of the information
contained on the website and such information should not be considered part of this Annual Report.
Board
and Committees
We
have five members on our Board, four of whom are independent members. The Board has an audit committee (the “Audit Committee”),
a compensation committee and a nominating and corporate governance committee. Each of our committees consists solely of independent directors.
Employees
As
of December 31, 2025, we had fifteen full-time employees. None of our employees are represented by a collective bargaining agreement.