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General

12 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NOTE 1 –

GENERAL

Integrity Applications, Inc. (the “Company”) was incorporated on May 18, 2010 under the laws of the State of Delaware. On July 15, 2010, Integrity Acquisition Corp. Ltd. (hereinafter: “Integrity Acquisition”), a wholly owned Israeli subsidiary of the Company, which was established on May 23, 2010, completed a merger with A.D. Integrity Applications Ltd. (hereinafter: “Integrity Israel”), an Israeli corporation that was previously held by the stockholders of the Company. Pursuant to the merger, all equity holders of Integrity Israel received the same proportional ownership in the Company as they had in Integrity Israel prior to the merger. Following the merger, Integrity Israel remained a wholly-owned subsidiary of the Company. As the merger transaction constituted a structural reorganization, the merger has been accounted for at historical cost in a manner similar to a pooling of interests. Integrity Israel was incorporated in 2001 and commenced its operations in 2002. Integrity Israel, a medical device company, focuses on the design, development and commercialization of non-invasive glucose monitoring devices for use by people with diabetes.

	B.	Going concern uncertainty and management plans

		Since its incorporation, the Company did not conduct any material operations other than those carried out by Integrity Israel. The development and commercialization of Integrity Israel’s product is expected to require substantial expenditures. Integrity Israel and the Company (collectively, the “Group”) have not yet generated significant revenues from operations, and therefore they are dependent upon external sources for financing their operations. As of December 31, 2018, the Group has incurred accumulated deficit of $87,186,783, stockholder’s deficit of $2,873,301, negative operating cash flows and negative working capital. Management considered the significance of such conditions in relation to the group’s ability to meet its current and future obligations and determined that these conditions raise substantial doubt about the Group’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. During the years ended December 31, 2016 and December 31, 2017, the Company raised funds in an aggregate amount of approximately $10.33 million (net of related cash expenses) through the issuance of 12,003.8 units (the “Series C Units”), each consisting of (a) one share of the Company’s newly designated Series C 5.5% Convertible Preferred Stock, par value $0.001 per share (the “Series C Preferred Stock”), convertible into Common Stock at an initial conversion price of $4.50 per share, (b) a five year warrant to purchase, at an exercise price of $4.50 per share, up to such number of shares of Common Stock issuable upon conversion of such share of Series C Preferred Stock (each a “Series C-1 Warrant”) and (c) a five year warrant to purchase, at an exercise price of $7.75 per share, up to such number of shares of Common Stock issuable upon conversion of such share of Series C Preferred Stock (each a “Series C-2 Warrant” and, together with the Series C-1 Warrants, collectively, the “Series C Warrants”). During the years ended December 31, 2017 and December 31, 2018, the Company raised funds in an aggregate amount of approximately $5.3 million (net of related cash expenses) through the issuance of 1,367,556 units (the “Series D Units”) each consisting of a) one share of Common Stock, Par Value $0.001 b) a five year warrant to purchase, at an exercise price of $4.50 per share, up to such number of shares of Common Stock issued c) a five year warrant to purchase, at an exercise price of $5.75 per share, up to such number of shares of Common Stock issued d) a five year warrant to purchase, at an exercise price of $7.75 per share, up to such number of shares of Common Stock issued.

		On December 21, 2018, the Company’s shareholders approved amendments to its Series A, Series B and Series C Preferred Stock, to permit a forced conversion of those instruments into shares of its common stock at a conversion price equal to the lower of $1.00 and the volume average weighted price of the Company’s common stock on the forty five (45) prior trading days, which, as of the Forced Conversion Date of December 31, 2018, was $.258 (the “Forced Conversion Price”). Furthermore, the purchase price for common stock issued by the Company in a series of private placement transactions since December 1, 2017 in an amount of $6,154,000 and the remaining $3,846,000 intended to be sold in connection therewith (known as the “D Round”) will also be reset to reflect the Forced Conversion Price. As a result, for each share of stock sold previously in the D Round, additional shares of common stock will be issued to the purchaser in an amount equal to the number of shares required so that the average per share price is reduced from $4.50 to the per share Forced Conversion Price, less the one (1) share already issued. For each unit purchased by a shareholder of the Corporation in each of the rounds in which Series A preferred stock was issued (the “A Round”), in which Series B preferred stock was issued (the “B Round”), in which Series C preferred stock was issued (the “C Round”) and in the D Round, the warrants issued with respect to that unit (i.e.: for the A Round, the A Warrants, for the B Round, the B-1 and B-2 Warrants, for the C Round, the C-1 and C-2 Warrants and for the D Round, the D-1, D-2 and D-3 Warrants), shall be cancelled, and instead the investor will receive per unit, three warrants, one with an exercise price of $1.80, one with an exercise price of $3.60 and one with an exercise price of $5.40, which warrants will otherwise contain the same terms and conditions as the warrants issued in the D Round (See Note 10B). Lastly, as disclosed in the Company’s Definitive Schedule 14A, filed on November 23, 2018, the warrants issued to Andrew Garrett, Inc. (“AGI Warrants”) by the Company contain full ratchet provisions pursuant to which as a result of the Forced Conversion Price, the exercise price of those warrants will be decreased, and the number of warrants increased proportionately.

		Until such time as the Group generates sufficient revenue to fund its operations (if ever), the Group plans to finance its operations through the sale of equity or equity- linked securities and/or debt securities and, to the extent available, short term and long term loans. There can be no assurance that the Group will succeed in obtaining the necessary financing to continue its operations as a going concern.

	C.	Risk factors

		As described in Note 1A and Note 1B above, the Group has a limited operating history and faces a number of risks and uncertainties, including risks and uncertainties regarding continuation of the development process, demand and market acceptance of the Group’s products, the effects of technological changes, competition and the development of products by competitors. Additionally, other risk factors also exist, such as the ability to manage growth and the effect of planned expansion of operations on the Group’s future results and the availability of necessary financing. In addition, the Group expects to continue incurring significant operating costs and losses in connection with the development of its products and marketing efforts. The Group has not yet generated material revenues from its operations to fund its activities and therefore is dependent on the receipt of additional funding from its stockholders and/ or new investors in order to continue its operations.