What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-31 compared with 2024-03-28 · 469 added, 125 removed, 26 unchanged (96% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

investors should read the following discussion and analysis of our financial condition and results of operations together with our financial

statements and the related notes and other financial information included elsewhere in this Report.

Some of the information contained

in this discussion and analysis or set forth elsewhere in this report, including information with respect to our plans and strategy for

our business and related financing, includes forward-looking statements that involve risks and uncertainties.

You should review the “Risk

Factors” section of this Report for a discussion of important factors that could cause actual results to differ materially from

the results described in or implied by the forward-looking statements contained in the following discussion and analysis .

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

Our mission is to become a leader in diabetes management by bringing to market innovative and cost-effective technologies that address

multiple verticals within the diabetes market.

We are developing an implantable CBGM.

This product is designed to have a 2-year implant

longevity without the requirement for any wearable components.

Accounting Policies

Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss our financial statements, which have

been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events,

and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures.

assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant

at the time our consolidated financial statements are prepared.

On a regular basis, management reviews the accounting policies, assumptions,

estimates and judgments to ensure that our financial statements are presented fairly and in accordance with U.S.

However, because

future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates,

and such differences could be material.

significant accounting policies are discussed in Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial

Statements included elsewhere in this report.

Accounting Estimates

discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which

have been prepared in accordance with U.S.

The preparation of our consolidated financial statements and related disclosures requires

us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosures.

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

Accounting Pronouncements

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

Improvements to Reportable Segment Disclosures”, which expands annual and interim disclosure requirements for reportable

segments, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for the Company’s

annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted.

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

Improvements to Income Tax Disclosures” to expand

the disclosure requirements for income taxes, specifically relating to the rate reconciliation and income taxes paid.

ASU 2023-09 is

effective for the Company’s annual periods beginning January 1, 2025, with early adoption permitted.

Company is currently evaluating the potential effects that ASU 2023-07 and ASU 2023-09 will have on the consolidated financial statement

of Operations

following discussion of our operating results explains material changes in our results of operations for the years ended December 31,

2023 and December 31, 2022.

The discussion should be read in conjunction with the financial statements and related notes included elsewhere

in this report.

Ended December 31, 2023 Compared to Year Ended December 31, 2022

and development expenses

and development expenses were $4,704 for the year ended December 31, 2023, as compared to $1,967 for the prior-year period.

increase is attributable to professional fees we accrued during the year.

discussion in this section contains forward-looking statements.

These statements relate to future events, our future operations or our

future financial performance.

We have attempted to identify forward-looking statements by terminology such as “anticipate,”

“believe,” “can,” “continue,” “could,” “estimate,” “expect,”

“intend,” “may,” “plan,” “potential,” “predict,” “should,” “would”

or “will” or the negative of these terms or other comparable terminology, but their absence does not mean that a statement

is not forward-looking.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, which

could cause our actual results to differ from those projected in any forward-looking statements we make.

Several risks and uncertainties

we face are discussed in more detail under “Risk Factors” in Part I, Item 1A of this Annual Report or in the discussion and

analysis below.

You should, however, understand that it is not possible to predict or identify all risks and uncertainties and you should

not consider the risks and uncertainties identified by us to be a complete set of all potential risks or uncertainties that could materially

You should not place undue reliance on the forward-looking statements we make herein because some or all of them may turn

out to be wrong.

We undertake no obligation to update any of the forward-looking statements contained herein to reflect future events

and developments, except as required by law.

The following discussion should be read in conjunction with the consolidated financial statements

and the notes to those statements included elsewhere in this Annual Report.

otherwise noted, all information in this Item 7 regarding share amounts of our Common Stock and prices per share of our Common Stock

has been adjusted to reflect the application of the one-for-five reverse stock split of our Common Stock that we effected on May 27,

2024 and the one-for-twenty reverse stock split of our Common Stock that we effected on February 3, 2025, as further described below,

on a retroactive basis.

Company was incorporated on May 18, 2010 under the laws of the State of Delaware.

We are currently developing an implantable CBGM,

the Glucotrack CBGM, for persons 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 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

measurement to continuous measurement since then, the Company recently determined that it would focus its efforts on developing its Glucotrack

As such, we have since withdrawn our CE Mark for Glucotrack and are no longer pursuing commercialization of this product or development

of any further iterations.

Company is currently developing the Glucotrack 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 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 four animal studies with evolving

prototype systems, all four of which consistently demonstrated a simple implant procedure, good functionality, and safety.

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 safety.

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.

regulatory submission has been made for a first in human study outside of the United States.

This will be an acute study intended to

demonstrate device performance and safety.

All preparatory clinical activities and applicable regulatory approvals are complete.

the Company is also preparing for a long-term clinical trial outside the United States that is expected to begin in the second quarter of 2025.

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.

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 and MiniMed (now Medtronic Diabetes) and Chief Financial

Officer, Peter C.

Wulff, who has over 35 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 ;

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, Abbott

Diabetes, and Medtronic Diabetes;

Vincent Wong, Vice President of Operations, 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;

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;

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.

and Development

of Preclinical Study

May 16, 2024, we announced that our implantable continuous glucose monitor successfully completed 30 days of a 60-day long-term preclinical

study on measuring glucose in the epidural space.

The Glucotrack sensor, implanted in the epidural space of animals, closely tracked

both blood glucose and a commercially available subcutaneous CGM throughout the 30-day period.

The implantation procedure took approximately

20 minutes, and the animals recovered without complications.

No abnormal clinical signs or findings in the spinal cord or surrounding

tissues were observed at the 30-day mark.

On June 13, 2024, we announced that the 60-day long-term study was completed, demonstrating

the feasibility of glucose monitoring in the epidural space.

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.

These developments mark another

potential use of the Glucotrack technology by combining the technology with a conventional spinal cord stimulator for treating patients

who have chronic lower back and lower limb pain, a significant proportion of which have diabetes.

February 4, 2025, we announced the successful completion of our first in-human clinical study, marking a significant milestone in continuous

glucose monitoring.

This study represents the first real-time CBGM placed in the subclavian vein,

offering the potential for direct blood glucose measurement without the limitations often seen with traditional continuous glucose monitors

that measure glucose levels in interstitial fluid.

prospective single arm study was a short-term in-hospital study over a period of four days, focusing on the safety and procedural

aspects of the Glucotrack CBGM sensor lead placement, use, and removal.

The sensor lead was placed intravascularly via a

percutaneous procedure and connected to a prototype sensor electronics component that was placed on the skin.

The six study

participants had been previously diagnosed with diabetes mellitus requiring glucose monitoring and intensive insulin

results established safety of the placement, usage and removal of the CBGM sensor lead.

While neither the study nor prototype system

was designed to evaluate sensor accuracy, the system performed as expected with similar accuracy results as previously seen in our animal

study met its primary endpoint with no procedure or device related serious adverse events reported from implant through seven days post-removal

of the CBGM sensor lead.

The study also confirmed the function of the CBGM sensor lead in the subclavian vein.

Placement and removal

procedures were successfully performed by interventional cardiologists.

13485:2016 Certification

January 21, 2025, we announced that we received ISO 13485:2016 certification from the British Standards Institute

We successfully completed Stage I and Stage II Assessments performed by the notified body, BSI, to verify 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 its products.

ISO 13485 is an internationally recognized standard for quality management systems,

created by the International Organization for Standardization to ensure the safety and effectiveness of medical devices.

on the ISO 9001 standard with additional regulatory requirements specific to medical devices.

In 2024, the FDA issued the Quality Management System Regulation Final Rule, which harmonizes U.S.

requirements with global standards

through the adoption of ISO 13485 for medical devices.

ISO 13485 is also strongly recommended and widely used in the European

and Regulatory

Listing Status

Listing Rule 5550(b)(1) requires companies listed on Nasdaq to maintain a minimum of $2,500,000 in stockholders’ equity for continued

On May 21, 2024, Nasdaq notified us that our Quarterly Report

on Form 10-Q for the period ended March 31, 2024, indicated that we no longer met the Minimum Stockholders’ Equity Requirement.

Failure to meet the Minimum Stockholders’ Equity Requirement was a basis for delisting our Common Stock.

we were not in compliance with the Bid Price Rule at the time we were notified about the non-compliance with the Minimum

Stockholders’ Equity Requirement, we were not eligible to submit a plan to regain compliance with the Staff.

However, we timely

requested a hearing before the Nasdaq Hearings Panel and paid the fee, which resulted in a stay of any suspension or delisting action

pending the hearing.

The hearing took place on July 9, 2024, and on August 5, 2024, we received the decision of the Panel, and they granted

us an extension until November 18, 2024 to regain compliance with the Minimum Stockholders’ Equity Requirement.

November 19, 2024, the Company received a Compliance Letter from Nasdaq, informing the Company that it had regained compliance with

the Minimum Stockholders’ Equity Requirement.

The Compliance Letter noted, that because the Company’s bid price has

closed below the minimum required by the Bid Price Rule following the 2024 November Offering (defined below), the Panel had

determined to impose on the Company a Discretionary Panel Monitor, pursuant to Listing Rule 5815(d)(4)(B), for a period of one year

from the date of the Compliance Letter, to ensure that the Company maintains long-term compliance with the Minimum

Stockholders’ Equity Requirement, the Bid Price Rule, and all of Nasdaq’s continued listing requirements.

December 31, 2024, we received a notification from Nasdaq that for at least the last 30 consecutive business days, the Company was not

in compliance with the Bid Price Rule and, in accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have a compliance period of 180 calendar

days, or until June 30, 2025, to regain compliance with the Bid Price Rule.

If at any time before June 30, 2025, the bid price of our

Common Stock closes at $1.00 per share or more for a minimum of ten consecutive business days, Nasdaq will provide us with a written

confirmation of compliance with the Bid Price Rule and the matter will be deemed closed.

we do not regain compliance with the Bid Price Rule by June 30, 2025, we may be eligible for an additional 180-day compliance period.

To qualify, we would be required to meet the continued listing requirement for market value of publicly held shares and all other initial

listing standards for the Nasdaq Capital Market, with the exception of the Bid Price Rule, and would need to provide written notice of

our intention to cure the bid price deficiency during the second compliance period by effecting a reverse stock split, if necessary.

can be no assurance that we will be able to continue to maintain compliance with Nasdaq’s continued listing requirements, the Bid

Price Rule, or other Nasdaq listing requirements.

See “ Risk Factors — Our failure to maintain compliance with Nasdaq’s

continued listing requirements could result in the delisting of our Common Stock .”

Reverse Stock Split

filed with the Delaware Secretary of State a Certificate of Amendment (the “May Certificate of Amendment”), to our

Certificate of Incorporation, as amended (the “Certificate of Incorporation”), which became effective at 4:30 p.m.

May 17, 2024 (the “First Effective Time”) to implement a one-for-five (1:5) reverse stock split (the “2024 Reverse

Stock Split”) of the shares of our Common Stock.

The 2024 Reverse Stock Split was approved by our stockholders at the 2024

annual meeting of the stockholders on April 26, 2024.

a result of the 2024 Reverse Stock Split, every five (5) shares of issued and outstanding Common Stock were automatically combined into

one (1) issued and outstanding share of Common Stock, without any change in the par value per share.

No fractional shares were issued

as a result of the 2024 Reverse Stock Split, and any person who would otherwise be entitled to a fractional share of Common Stock as

a result of the 2024 Reverse Stock Split was entitled to receive a cash payment equal to the fraction of a share of Common Stock to which

such holder would otherwise be entitled, multiplied by the closing price per share of the Common Stock on Nasdaq at the close of business

on the date prior to the First Effective Time.

the 2024 Reverse Stock Split, the number of shares of Common Stock outstanding was proportionally reduced.

The shares of Common Stock

underlying the outstanding stock options and warrants were similarly adjusted along with corresponding adjustments to their exercise

The 2024 Reverse Stock Split also proportionally reduced the total number of authorized shares of Common Stock from 500,000,000

shares to 100,000,000 shares.

Reverse Stock Split

filed with the Delaware Secretary of State a Certificate of Amendment to our Certificate of Incorporation (the “2025

Certificate of Amendment”) which became effective at 4:30 p.m.

on February 3, 2025 (the “Second Effective Time”),

to implement a reverse stock split at a ratio of 1-for-20 (the “2025 Reverse Stock Split”) of the shares of our Common

The 2025 Reverse Stock Split was approved by our stockholders at the special meeting of our stockholders held on January 3,

2025 (the “Special Meeting”).

As a result of the 2025 Reverse Stock Split, every twenty (20) shares of issued and outstanding Common Stock were

automatically combined into one (1) issued and outstanding share of Common Stock, without any change in the par value per share.

No fractional

shares were issued as a result of the 20254 Reverse Stock Split, and instead, stockholders who otherwise would have been entitled to receive

fractional shares because they held a number of shares not evenly divisible by the Reverse Stock Split ratio were entitled to receive

an additional fraction of a share of Common Stock to round up to the next whole share.

addition, the stockholders approved at the Special Meeting an increase in our authorized shares of Common Stock from 100,000,000 to 250,000,000,

as well as the full issuance of shares of Common Stock issuable by us upon the exercise of Series A Warrants and Series B Warrants (further

described below).

in Authorized Common Stock

January 3, 2025, the Company filed an amendment to the Company’s Certificate of Incorporation, as to increase the Company’s

authorized shares of Common Stock from 100,000,000 to 250,000,000.

2024 Exchange

February 13, 2024, we entered into the February Exchange Agreement with the February Holders, pursuant to which the Company and the

February Holders agreed to exchange the February

Warrants owned by the February Holders for shares of Common Stock to be issued by the Company.

February 13, 2024, the Company closed the February Exchange and issued to the February Holders an aggregate of 35,932 shares of Common Stock in exchange for 43,820 February Warrants.

Private Placement

April 22, 2024, we entered into a private placement agreement under which the Company issued 3,968 shares of its Common Stock at a price

of $126.0 per share for aggregate gross proceeds of $500,000.

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

of Directors and existing shareholders.

27 Private Placement

June 27, 2024, we entered into note and warrant purchase agreements with the June 27 Investors, providing for the private placement of unsecured promissory notes in the

aggregate principal amount of $100,000 and to purchase

up to an aggregate of 15,000 shares of Common Stock.

The closing occurred on June 27, 2024.

18 Private Placement

July 18, 2024, we entered into a series of convertible promissory notes with the July 18 Investors, providing for the private placement of unsecured convertible promissory notes in the aggregate

principal amount of $360,000.

August 23, 2024, two of the June 27 Investors entered into conversion agreements with the Company, pursuant to which the Company agreed

to convert the principal amount, plus any accrued but unpaid interest, of each of the June 27 Notes, totaling $20,076 each, held by the

investors into Common Stock at a conversion price of $20.40 per share.

On September 5, 2024, another June 27 Investor entered into a separate

conversion agreement with the Company, under which the Company agreed to convert

the principal amount, plus any accrued but unpaid interest, of the June 27 Note held by the investor, totaling $259,310, into Common

Stock at the same conversion price of $20.40 per share.

in satisfaction of the debt and pursuant to the August Conversion Agreement, the Company issued to each of the two June 27 Investors

that converted their notes in August, three August 23 Warrants.

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 535 shares of Common Stock and is exercisable at $37.50 per share.

second August 23 Warrant is for 382 shares of Common Stock, exercisable at $52.50 per share.

The third August 23 Warrant is for 297

shares of Common Stock, exercisable at $67.50 per share.

The June 27 Investor that converted his note in September was issued three September 5 Warrants on the same terms as the August 23 Warrants.

The first September 5 Warrant is

for 6,915 shares of Common Stock and is exercisable at $37.50 per share.

The second September 5 Warrant is for 4,940 shares of

Common Stock, exercisable at $52.50 per share.

The third September 5 Warrant is for 3,842 shares of Common Stock, exercisable at

$67.50 per share.

30 Private Placement

July 30, 2024, we entered into the July 30 Note and three July 30 Warrants with the July 30 Holder, providing for the private placement

of a secured convertible promissory note in the aggregate principal amount of $4,000,000.

Note bore simple interest at the rate of eight percent (8%) per annum and is due and payable in cash on the earlier of:

(a) the twelve

(12) month anniversary of July 30 Note, or (b) the date of closing of a Sale Transaction.

The July 30 Note was secured by a first-priority security interest on all Company assets.

Million Public Offering and Concurrent Private Placement

November 13, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain

purchasers identified on the signature pages therein, pursuant to which the Company sold in a “best efforts” public

offering (the “2024 November Offering”), pursuant to an effective registration statement on Form S-1 (File No.

282158) under the Securities Act, an aggregate of (i) 121,867 shares of its

Common Stock (the “Shares”), (ii) 237,845 pre-funded warrants to purchase up to an aggregate of 237,845 shares of Common

Stock in lieu of Shares (the “Pre-Funded Warrants”), (iii) 359,712 Series A Common Warrants, and (iv) 359,712 Series B

Common Warrants.

The public offering price for each Share and accompanying Common Warrants was $27.80, and the public offering price

for each Pre-Funded Warrant and accompanying Common Warrants was $27.78 (the “Offering Price”).

a private placement offering completed concurrently with the Offering (the “Concurrent Private Offering”), the July 30

Holder, converted approximately $4,093,112 of debt, which represented the then outstanding principal and accrued interest under a

convertible promissory note dated July 30, 2024 (the “July 30 Note Debt”).

The July 30 Note Debt was converted to Common

Stock and Series A Common Warrants and Series B Common Warrants on substantially the same terms as the November 2024 Offering,

resulting in the issuance of 132,036 shares of Common Stock, 132,036 accompanying Series A Common Warrants, and 132,036 accompanying

Series B Common Warrants, based on a conversion price of $31.00 per share, which is equal to the consolidated closing bid price of

the Common Stock on the Nasdaq Capital Market on November 12, 2024.

addition, concurrently with the November 2024 Offering, the Company completed the July 18 Note Conversion of the outstanding July 18

The July 18 Notes, which represented an aggregate outstanding principal and accrued interest in the amount of $304,494 were converted

at a conversion price of $31.20, which is equal to the Floor Price as defined in the July 18 Notes, for an aggregate of 9,760 shares

of Common Stock, 9,760 Series A Common Warrants, and 9,760 Series B Common Warrants.

Sales Agreement

December 17, 2024, we entered into an ATM sales agreement (the “Sales Agreement”) with Dawson James Securities, Inc.

James”), pursuant to which we have agreed to issue and sell shares of Common Stock, having an aggregate offering price of up to

$8.23 million, from time to time, through an “at-the-market” equity offering program under which Dawson James will act as

sales agent (the “Agent”).

As of December 31, 2024, no sales of Common Stock had been made pursuant to the Sales Agreement.

On March 21, 2025, we sold

12,377,967 shares of Common Stock at an average offering price of $0.304 per share pursuant to the Sales Agreement (the “March

We received net proceeds of approximately $3,643,000, after deducting fees owed to the placement agent from such

2025 Registered Direct Offering

February 4, 2025, we entered into a securities purchase agreement with certain institutional investors, relating to the registered direct

offering and sale of an aggregate of 2,638,042 shares of Common Stock at an offering price of $1.15 per share.

The shares of Common Stock

were offered by the Company pursuant to a prospectus supplement dated February 4, 2025, and accompanying prospectus dated October 3,

2024, in connection with a takedown from the Company’s shelf registration statement on Form S-3 (Registration No.

which was declared effective by the SEC, on October 3, 2024 (the “February 2025 Offering” and, together with the March ATM Sale, the “2025 Offerings”).

Dawson James acted as

the placement agent for the offering pursuant to a placement agency agreement, dated February 4, 2025, by and between the Company and

Dawson James.

The net proceeds to the Company from the offering were approximately $2,706,000, after deducting fees owed to Dawson

James and other offering expenses.

The February 2025 Offering closed on February

on January 6, 2025, through March 13, 2025, the Company received exchange notices from certain holders of the Series B Warrants, with

respect to an aggregate of 359,612 of the Series B Warrants, requiring the delivery of 9,721,782 shares of Common Stock.

The remaining

100 Series B Warrants are exchangeable for an aggregate of approximately 1,940 shares of Common Stock (subject to adjustment in the event

of any stock dividend and split, reverse stock split, recapitalization, reorganization or similar transaction).

Pro Forma Impact of Registered Direct Offerings,

Warrant Exchange, and Series A Warrant Revaluation

The following financial information

has been developed by application of pro forma adjustments to the historical financial statements of the Company appearing elsewhere in

this Annual Report.

The unaudited pro forma information gives effect to the 2025 Offerings, the exchange of Series B Warrants to common

stock, and the revaluation of Series A Warrants.

The unaudited pro forma

financial information is presented for informational purposes only and does not purport to represent what the results of operations or

financial position of the Company would have been had the transactions described above actually occurred on the dates indicated, nor do

they purport to project the financial condition of the Company for any future period or as of any future date.

The unaudited pro forma

financial information should be read in conjunction with the Company’s financial statements and notes thereto included elsewhere in this

Annual Report.

Pro Forma Balance Sheet

Year Ended December 31, 2024

Series B Warrant Exercise

2025 Offerings

Revaluation of Series A Warrants

Pro Forma as Adjusted

Current Assets

Cash and cash equivalents

Other current assets

Total current assets

Operating lease right-of-use asset, net

Property and equipment, net

Restricted cash

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

Current Liabilities

Accounts payable

Operating lease liability

Convertible promissory notes

Other current liabilities

Total current liabilities

Non-Current Liabilities

Derivative financial liabilities

Operating lease liability, non-current

Loans from stockholders

Total liabilities

Commitments and contingent liabilities

Stockholders’ (Deficit) Equity

Common Stock of $0.001 par value

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

791,609 and 208,914 shares issued and outstanding as of December 31, 2024 and 2023, respectively

Additional paid-in capital

Receipts on account of shares

Accumulated other comprehensive income

Accumulated deficit

Total stockholders’ (deficit) equity

TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

and Development

and development expenses consist primarily of salaries and other personnel-related expenses, including stock-based compensation expenses,

1 unchanged sentence

We expect research and development expenses to increase in 2025 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.

and administrative expenses

and administrative expenses were $2,278 for the year ended December 31, 2023, as compared to $2,465 for the prior-year period.

is primarily attributable to the decrease in stock based compensation expense in 2023 versus 2022.

primarily due to expanding clinical trial activities, hiring additional personnel, as well the development of Glucotrack CBGM;

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 other product candidates.

and Administrative

and administrative expenses consist primarily of professional services, salaries, travel expenses and other related expenses for executive,

3 unchanged sentences

and accounting services.

Financing Income, net

income, net was $7 for the year ended December 31, 2022, as compared to $11 for the prior-year period.

decrease in the financing income is attributed to the reduction in the company’s

cash balance over the year.

(Income) Expense

income expense, consist primarily of the change in fair value of derivatives liabilities, loss on the issuance of equity, loss on settlement

of debt to equity and finance income.

of Operations – Comparison of the Years Ended December 31, 2024 and 2023

All information below is stated in thousands of US dollars.

following discussion of our operating results explains material changes in our results of operations for the years ended December 31,

2024 and December 31, 2023.

The discussion should be read in conjunction with the financial statements and related notes included elsewhere

in this Annual Report.

and Development Expense

and development expenses were $9,499 for the year ended December 31, 2024, as compared to $4,704 for the prior-year period.

of $4,795 was primarily attributable to increased expenses related to product design, development and manufacturing activities and pre-clinical

animal studies.

and Administrative Expense

and administrative expenses were $4,655 for the year ended December 31, 2024, as compared to $2,278 for the prior-year period.

of $2,377 is primarily attributable to increased legal and professional fees, personnel costs and placement agent fees.

compensation expense included in research and development and general and administrative expense, for the fiscal years ended December

31, 2024 and 2023, was comprised as follows:

Research and development

General and administrative

increase in share-based compensation expense is attributable to the current year vesting of equity awards granted to employees, directors

and consultants supporting our research and development and general and administrative functions.

(Income) Expense, net

expense was $8,050 for the year ended December 31, 2024, as compared to other income $7 for the prior-year period.

The increase in other

expense is primarily attributed to recognized losses on the settlement of debt and the issuance of warrants containing derivative features.

loss was $22,597 for the year ended December 31, 2024, as compared to a net loss of $7,097 for the prior-year period.

The increase in

net loss is attributable primarily to the increase in our general and administrative expenses and development expenses as described above.

net loss is attributable primarily to the expense classifications discussed above.

and Capital Resources

the years ended December 31, 2023 and December 31, 2022, our net losses were $7,097 million and $4,435, respectively.

As of December

31, 2023, we had an accumulated deficit of $109,853.

Our primary requirements for liquidity have been to fund our clinical trial activity

and general corporate and working capital needs.

April 13, 2023, the Company completed an underwritten public offering under which the Company received gross proceeds of approximately

$10 million for issuance of (i) 5,376,472 shares of common stock and (ii) 1,976,470 pre-funded warrants at a price to the public of $1.36

of December 31, 2024, we had $5,617 in cash and cash equivalents compared with $4,492 in cash and cash equivalents as of December 31,

The net increase in cash and cash equivalents was attributable to the $13,743 received from financing activities offset by cash

used in operating and investing activities of $12,594.

have a history of recurring losses, and as of December 31, 2024, we have a stockholders’ deficiency of $13,000.

During the fiscal

year ended December 31, 2024, we recorded a net loss of $22,597.

Our primary requirements for liquidity have been to fund product and

clinical development activities and to satisfy our general corporate and working capital needs.

to December 31, 2024, we received approximately $6,349 through the February 2025 Offering and the March ATM Sale.

as noted above, the impact of the subsequent financings, the exercise of Series B Warrants and the revaluation of Series A warrants

has resulted in Stockholders’ Equity of $10,629 as of December 31, 2024, on a pro forma basis.

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

3 unchanged sentences

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,

We have raised 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.

5 unchanged sentences

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.

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 $4,492.

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 operations.

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

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 shelf registration statement on Form S-3 was declared effective on September 27, 2021 by the Securities and Exchange Commission

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

There can be no assurance that we will succeed in obtaining the necessary financing to continue our operations.

the years 2003-2004, Integrity Israel received loans from stockholders (four separate lenders).

The loans are indexed to the Israeli

Consumer Price Index from their origination date and bear no interest.

The Company will be required to pay the loans, in quarterly installments,

commencing on the first quarter following the first fiscal year in which the Company reports net profit in its annual report.

time, the Company will be required to make quarterly payments equal to 10% of its total sales for each quarter until the loans have been

repaid in full.

Notwithstanding the repayment mechanism, the Company will not be required to repay the loans during any period in which

such payment would cause a deficit in the Company’s working capital.

As of December 31, 2023, the Company does not expect to make

any material repayments during the following 12-month period, if any, and accordingly the balance of $196 of the loans from stockholders,

have been presented as long-term liabilities.

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

products arising from the development plan up to an amount equal to $93, plus interest at LIBOR from the date of grant.

replacement of the LIBOR benchmark rate, even though the IIA has not declared the alternative benchmark rate to replace the LIBOR,

we do not believe it will have a significant impact.

As of December 31, 2023, the contingent liability with respect to royalty

payment on future sales equals to approximately $73, excluding interest.

Ended December 31, 2023 Compared to Year Ended December 31, 2022

Cash Used in Operating Activities for the Years Ended December 31, 2023 and December 31, 2022

cash used in operating activities was $6,558 and $3,729 for the years ended December 31, 2023 and 2022, respectively.

Net cash used in

operating activities primarily reflects the net loss for those periods of $7,097 and $4,435, respectively, less reduction in stock-based compensation expenses and change in working

Cash Provided by Investing Activities for the Years Ended December 31, 2023 and December 31, 2022

cash provided by investing activities was $0 and $1 for the years ended December 31, 2023 and 2022, respectively, mainly consisting of

equipment sales and purchases (such as computers, research and development and office equipment).

Cash Provided by Financing Activities for the Years Ended December 31, 2023 and December 31, 2022

cash provided by financing activities was $8,730 for the year ended December 31, 2023, due to the proceeds from the April 2023 public

There were no financing activities during the year ended December 31, 2022.

Sheet Arrangements

of December 31, 2023, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

Quantitative and Qualitative Disclosures About Market Risk.

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

date, we have not yet commercialized the Glucotrack CBGM.

Further development and commercialization efforts are expected to

require substantial additional expenditure.

Therefore, we are dependent upon external sources for financing our operations.

As of December

31, 2024, we have incurred a stockholders’ deficiency of $13,000, which includes an accumulated deficit of $132,450.

we have generated operating losses and negative operating cash flow for all reported periods.

As of December 31, 2024, the balance of

cash and cash equivalents amounted to $5,617.

the year ended December 31, 2024, we received approximately $13,734 through public offerings and debt issuances which were

subsequently converted to equity.

In addition, subsequent to the balance sheet date, we received $6,349 through the sale of

shares of Common Stock.

We plan to finance our operations through the sale of debt or equity securities (including the shelf

registration statement on Form S-3 that was declared effective on October 3, 2024 by the SEC which allows us to register up to

$30,000 of certain equity and/or debt securities of the Company through prospectus supplement).

There can be no assurance that we

will succeed in obtaining the necessary financing or generating sufficient revenue from sale of the Glucotrack CBGM in order to

continue our operations as a going concern.

has considered the significance of such conditions in relation to our ability to meet current obligations and to achieve our business

targets and determined that these conditions raise substantial doubt about our ability to continue as a going concern.

Accounting Policies and Estimates

discussion and analysis of our financial condition and results of operations are based on our audited consolidated financial statements,

which have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP.

The preparation of

these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues,

expenses, and related disclosures.

We evaluate our estimates on an ongoing basis.

We base our estimates on historical experience and

on other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments

about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from

these estimates under different assumptions or conditions.

believe the following accounting policies and estimates are critical to aid you in understanding and evaluating our reported financial

grant equity-based awards under share-based compensation plans.

We estimate the fair value of share-based payment awards using the Black-Scholes

option valuation model.

This fair value is then amortized over the requisite service periods of the awards.

The Black-Scholes option

valuation model requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest

rate, dividend yield, and expected life of the option.

Share-based compensation expense is based on awards ultimately expected to vest

and therefore is reduced by expected forfeitures.

Changes in assumptions used under the Black-Scholes option valuation model could materially

affect our net loss and net loss per share.

Financial Instruments

review the terms of the Common Stock, warrants and convertible debt we issue to determine whether there are derivative instruments, including

embedded conversion options that are required to be bifurcated and accounted for separately as derivative financial instruments.

In circumstances

where the host instrument contains more than one embedded derivative instrument, including a conversion option, that is required to be

bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating

income or expense.

When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated

and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative

The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments

being recorded at a discount from their face value.

Accounting Pronouncements

regarding recent accounting pronouncements is contained in Note 2 to the Consolidated

Financial Statements, included elsewhere in this report.

Balance Sheet Arrangements

do not have any off-balance sheet arrangements.

Quantitative and Qualitative Disclosure About Market Risk

a smaller reporting company, we have elected not to provide the disclosure required by this item.

Financial Statements and Supplementary Data

financial statements required by this Item 8 are filed herewith commencing on page F-1 hereto and are incorporated herein by reference.

Change in and Disagreements with Accountants on Accounting and Financial Disclosure.

is made to pages F-1 through F-31 comprising a portion of this Annual Report on Form 10-K, which are incorporated by reference

under this Item.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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

What changed 10-K

Item 7. Management’s Discussion and Analysis