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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| For the quarterly period ended September 30, 2024

or

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| For the transition period from ________________ to ________________

Commission File Number: 001-41141

GLUCOTRACK, INC.

(Exact name of registrant as specified in its charter)

Delaware |  | 98-0668934
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
301 Route 17 North, Suite 800 Rutherford, NJ |  | 07070
(Address of principal executive offices) |  | (Zip Code)

(201) 842-7715

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Common Stock |  | GCTK |  | The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

| Large accelerated filer ☐ |  | Accelerated filer ☐
| Non-accelerated filer ☒ |  | Smaller reporting company ☒
| Emerging growth company ☐ |  |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 3, 2024, 5,772,026 shares of the Company’s common stock, par value $0.001 per share, were outstanding.

GLUCOTRACK INC.

TABLE OF CONTENTS

|  | Page
PART I - FINANCIAL INFORMATION |  | 4
Item 1. Financial Statements. |  | 4
Condensed Consolidated Balance Sheets |  | 4
Condensed Consolidated Statements of Operations and Comprehensive Loss |  | 5
Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit) |  | 6
Condensed Consolidated Statements of Cash Flows |  | 7
Notes to Condensed Consolidated Financial Statements |  | 8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. |  | 22
Item 3. Quantitative and Qualitative Disclosures About Market Risk. |  | 26
Item 4. Controls and Procedures. |  | 27
PART II - OTHER INFORMATION |  | 28
Item 1. Legal Proceedings |  | 28
Item 1A. Risk Factors |  | 28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |  | 30
Item 3. Defaults Upon Senior Securities |  | 30
Item 4. Mine Safety Disclosures |  | 30
Item 5. Other Information |  | 30
Item 6. Exhibits. |  | 31
EXHIBIT INDEX |  | 31
SIGNATURES |  | 32

2

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements. These forward-looking statements include statements about our expectations, beliefs or intentions regarding our product development efforts, business, financial condition, results of operations, strategies or prospects. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q, including statements regarding our future activities, events or developments, including such things as future revenues, product development, clinical trials, regulatory approval, market acceptance, responses from competitors, capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, competitive strengths, goals, expansion and growth of our business and operations, plans, references to future success, projected performance and trends, and other such matters, are forward-looking statements. The words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “plan,” “may,” “will,” “could,” “would,” “should” and other similar words and phrases or the negative of such terms, are intended to identify forward-looking statements. The forward-looking statements made in this Quarterly Report on Form 10-Q are based on certain historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. These statements relate only to events as of the date on which the statements are made and we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. All of the forward-looking statements made in this Quarterly Report on Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on us or our business or operations. Whether actual results will conform to our expectations and predictions is subject to a number of risks and uncertainties that may cause actual results to differ materially. Risks and uncertainties, the occurrence of which could adversely affect our business, include the risks identified in our Annual Report on Form 10-K for year ended December 31, 2023, under the caption “Risk Factors.” We undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report unless required by law.

3

GLUCOTRACK INC.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

GLUCOTRACK INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands of US dollars except share data)

|  | September 30, 2024 |  |  | December 31, 2023 |
|  | Unaudited |  |  |  |
ASSETS |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 346 |  |  | $ | 4,492 |
Other current assets |  |  | 296 |  |  |  | 376 |
Total current assets |  |  | 642 |  |  |  | 4,868 |
Operating lease right-of-use asset, net (Note 3C) |  |  | 65 |  |  |  | - |
Property and equipment, net |  |  | 109 |  |  |  | 27 |
Restricted cash |  |  | 10 |  |  |  | 10 |
TOTAL ASSETS |  | $ | 826 |  |  | $ | 4,905 |
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |
Accounts payable |  | $ | 1,857 |  |  | $ | 839 |
Operating lease liability, current (Note 3C) |  |  | 25 |  |  |  | - |
Promissory notes (Note 3G and Note 3H) |  |  | 1,988 |  |  |  | - |
Convertible promissory notes (Note 3F) |  |  | 5 |  |  |  | - |
Derivative financial liabilities (Note 3G and Note 3H) |  |  | 37 |  |  |  | - |
Other current liabilities |  |  | 699 |  |  |  | 673 |
Total current liabilities |  |  | 4,611 |  |  |  | 1,512 |
Non-current liabilities |  |  |  |  |  |  |  |
Loans from stockholders |  |  | 197 |  |  |  | 196 |
Operating lease liability, non-current (Note 3C) |  |  | 40 |  |  |  | - |
Total liabilities |  |  | 4,848 |  |  |  | 1,708 |
Commitments and contingent liabilities (Note 4) |  |  | - |  |  |  |  |
Stockholders’ equity |  |  |  |  |  |  |  |
Common Stock of $ 0.001 par value (“Common Stock”): |  |  |  |  |  |  |  |
100,000,000 shares authorized as of September 30, 2024 and December 31, 2023; 5,772,026 and 4,178,274 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively |  |  | 6 |  |  |  | 4 |
Common Stock of $ 0.001 par value (“Common Stock”):100,000,000 shares authorized as of September 30, 2024 and December 31, 2023; 5,772,190 and 4,178,274 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively |  |  | 6 |  |  |  | 4 |
Additional paid-in capital |  |  | 118,223 |  |  |  | 112,982 |
Receipts on account of shares |  |  | 100 |  |  |  | 48 |
Accumulated other comprehensive income |  |  | 5 |  |  |  | 16 |
Accumulated deficit |  |  | (122,356 | ) |  |  | (109,853 | )
Total stockholders’ (deficit) equity |  |  | (4,022 | ) |  |  | 3,197 |
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY |  | $ | 826 |  |  | $ | 4,905 |

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

4

GLUCOTRACK INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands of US dollars except share data) (unaudited)

|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  | Three-month period ended September 30, |  |  | Nine-month period ended September 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Research and development expenses |  | $ | 2,063 |  |  | $ | 1,693 |  |  | $ | 7,800 |  |  | $ | 2,962 |
Marketing expenses |  |  | 125 |  |  |  | - |  |  |  | 295 |  |  |  | - |
General and administrative expenses |  |  | 1,063 |  |  |  | 531 |  |  |  | 2,598 |  |  |  | 1,725 |
Total operating expenses |  |  | 3,251 |  |  |  | 2,224 |  |  |  | 10,693 |  |  |  | 4,687 |
Operating loss |  |  | 3,251 |  |  |  | 2,224 |  |  |  | 10,693 |  |  |  | 4,687 |
Other income |  |  | (12 | ) |  |  | - |  |  |  | (12 | ) |  |  | - |
Finance (income) expenses, net (Note 5) |  |  | 1,848 |  |  |  | (1 | ) |  |  | 1,822 |  |  |  | (2 | )
Net Loss |  |  | 5,087 |  |  |  | 2,223 |  |  |  | 12,503 |  |  |  | 4,685 |
Other comprehensive (income) loss: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation adjustment |  |  | 17 |  |  |  | (6 | ) |  |  | 11 |  |  |  | (17 | )
Comprehensive loss for the period |  | $ | 5,104 |  |  | $ | 2,217 |  |  | $ | 12,514 |  |  | $ | 4,668 |
Basic and diluted net loss per common stock |  | $ | (0.91 | ) |  | $ | (0.49 | ) |  | $ | (2.39 | ) |  | $ | (1.38 | )
Weighted average number of common stock used in computing basic and diluted loss per common stock |  |  | 5,594,880 |  |  |  | 4,593,733 |  |  |  | 5,355,806 |  |  |  | 4,006,527 |

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

5

GLUCOTRACK INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands of US Dollars except share data) (unaudited)

|  | In thousands of US Dollars (except share data) |
|  | Common Stock |  |  | Additional |  |  | Receipts |  |  | Accumulated Other |  |  |  |  |  | Total Stockholders’ |
|  | Numbers of Shares |  |  | Amount |  |  | Paid-in Capital |  |  | on account of shares |  |  | Comprehensive Income |  |  | Accumulated Deficit |  |  | Equity (Deficit) |
Balance as of January 1, 2023 |  |  | 3,099,982 |  |  | $ | 3 |  |  | $ | 103,107 |  |  | $ | 4 |  |  | $ | 17 |  |  | $ | (101,901 | ) |  | $ | 1,230 |
Loss for the period |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (4,685 | ) |  |  | (4,685 | )
Other comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 17 |  |  |  | - |  |  |  | 17 |
Stock-based compensation |  |  | - |  |  |  | - |  |  |  | 260 |  |  |  |  |  |  |  | - |  |  |  | - |  |  |  | 260 |
Deemed dividend resulted from trigger of down round protection feature of certain warrants granted |  |  | - |  |  |  | - |  |  |  | 855 |  |  |  | - |  |  |  | - |  |  |  | (855 | ) |  |  | - |
Issuance of Common Stock and pre-funded warrants upon completion of public offering, net of offering expenses |  |  | 1,075,294 |  |  |  | 1 |  |  |  | 8,729 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 8,730 |
Issuance of restricted shares as compensation towards directors |  |  | 2,998 |  |  |  | -(*) |  |  |  | 9 |  |  |  | (4 | ) |  |  | - |  |  |  | - |  |  |  | 5 |
Balance as of September 30, 2023 |  |  | 4,178,274 |  |  | $ | 4 |  |  | $ | 112,960 |  |  | $ | - |  |  | $ | 34 |  |  | $ | (107,441 | ) |  | $ | 5,557 |
Balance at July 1, 2023 |  |  | 4,178,274 |  |  | $ | 4 |  |  | $ | 112,929 |  |  | $ | - |  |  | $ | 28 |  |  | $ | (105,218 | ) |  | $ | 7,743 |
Loss for the period |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (2,223 | ) |  |  | (2,223 | )
Other comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 6 |  |  |  | - |  |  |  | 6 |
Stock-based compensation |  |  | - |  |  |  | - |  |  |  | 31 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 31 |
Balance as of September 30, 2023 |  |  | 4,178,274 |  |  | $ | 4 |  |  | $ | 112,960 |  |  | $ | - |  |  | $ | 34 |  |  | $ | (107,441 | ) |  | $ | 5,557 |
Balance as of January 1, 2024 |  |  | 4,178,274 |  |  | $ | 4 |  |  | $ | 112,982 |  |  | $ | 48 |  |  | $ | 16 |  |  | $ | (109,853 | ) |  | $ | 3,197 |
Loss for the period |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (12,503 | ) |  |  | (12,503 | )
Other comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (11 | ) |  |  | - |  |  |  | (11 | )
Stock-based compensation |  |  | - |  |  |  | - |  |  |  | 239 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 239 |
Issuance of restricted shares as compensation towards directors |  |  | 86,861 |  |  |  | (*) |  |  |  | 126 |  |  |  | (48 | ) |  |  | - |  |  |  | - |  |  |  | 78 |
Restricted shares to be issued as compensation towards directors |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 100 |  |  |  | - |  |  |  | - |  |  |  | 100 |
Exercise of prefunded warrants into shares (Note 3A) |  |  | 395,294 |  |  |  | (*) |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Exchange of warrants into shares (Note 3B) |  |  | 718,641 |  |  |  | 1 |  |  |  | (1 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Issuance of Common Stock upon private placement transaction (Note 3D) |  |  | 79,366 |  |  |  | (*) |  |  |  | 500 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 500 |
Issuance of detachable warrants through private placement transactions (Note 3F and Note 3H) |  |  | - |  |  |  | - |  |  |  | 2,635 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,635 |
Issuance of shares and warrants as settlement of financial liabilities (Note 3I and Note 3J) |  |  | 293,590 |  |  |  | 1 |  |  |  | 1,742 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,743 |
Issuance of restricted shares as payment for a previous achievement of milestone pursuant to purchase agreement (Note 4B) |  |  | 20,000 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Balance as of September 30, 2024 |  |  | 5,772,026 |  |  | $ | 6 |  |  | $ | 118,223 |  |  | $ | 100 |  |  | $ | 5 |  |  | $ | (122,356 | ) |  | $ | (4,022 | )
Balance as of July 1, 2024 |  |  | 5,478,436 |  |  | $ | 5 |  |  | $ | 113,903 |  |  | $ | 50 |  |  | $ | 22 |  |  | $ | (117,269 | ) |  | $ | (3,289 | )
Balance |  |  | 5,478,436 |  |  | $ | 5 |  |  | $ | 113,903 |  |  | $ | 50 |  |  | $ | 22 |  |  | $ | (117,269 | ) |  | $ | (3,289 | )
Loss for the period |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (5,087 | ) |  |  | (5,087 | )
Other comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (17 | ) |  |  | - |  |  |  | (17 | )
Stock-based compensation |  |  | - |  |  |  | - |  |  |  | 11 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 11 |
Restricted shares to be issued as compensation towards directors |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 50 |  |  |  | - |  |  |  | - |  |  |  | 50 |
Issuance of detachable warrants through private placement transactions (Note 3F and Note 3H) |  |  | - |  |  |  | - |  |  |  | 2,567 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,567 |
Issuance of shares and warrants as settlement of financial liabilities (Note 3I and Note 3J) |  |  | 293,590 |  |  |  | 1 |  |  |  | 1,742 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,743 |
Balance as of September 30, 2024 |  |  | 5,772,026 |  |  | $ | 6 |  |  | $ | 118,223 |  |  | $ | 100 |  |  | $ | 5 |  |  | $ | (122,356 | ) |  | $ | (4,022 | )
Balance |  |  | 5,772,026 |  |  | $ | 6 |  |  | $ | 118,223 |  |  | $ | 100 |  |  | $ | 5 |  |  | $ | (122,356 | ) |  | $ | (4,022 | )

(*) | Represents amount lower than $1.

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

6

GLUCOTRACK INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of US Dollars) (Unaudited)

|  | 2024 |  |  | 2023 |
|  | Nine-month period ended September 30, |
|  | 2024 |  |  | 2023 |
CASH FLOWS FROM OPERATING ACTIVITIES |  |  |  |  |  |  |  |
Loss for the period |  | $ | (12,503 | ) |  | $ | (4,685 | )
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |  |  |  |
Depreciation |  |  | 22 |  |  |  | 21 |
Stock-based compensation |  |  | 239 |  |  |  | 260 |
Issuance of restricted shares as compensation towards directors |  |  | 178 |  |  |  | 5 |
Linkage difference on principal of loans from stockholders |  |  | 1 |  |  |  | 4 |
Revaluation expenses incurred from settlement of financial liabilities (Note 3I and Note 3J) |  |  | 1,505 |  |  |  | - |
Revaluation expenses related to derivative financial liabilities (Note 3H) |  |  | 2 |  |  |  | - |
Discount amortization and interest expenses related to promissory notes (Note 3F, Note 3G and Note 3H) |  |  | 330 |  |  |  | - |
Changes in assets and liabilities: |  |  |  |  |  |  |  |
Other current assets |  |  | 80 |  |  |  | (216 | )
Accounts payable |  |  | 1,129 |  |  |  | 598 |
Other current liabilities |  |  | 26 |  |  |  | (134 | )
Net cash used in operating activities |  |  | (8,991 | ) |  |  | (4,147 | )
CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |  |  |  |  |
Purchase of property and equipment |  |  | (104 | ) |  |  | - |
Net cash used in investing activities |  |  | (104 | ) |  |  | - |
CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |  |  |  |  |
Proceeds received from private placement transaction (Note 3D) |  |  | 500 |  |  |  | - |
Issuance of promissory notes and detachable warrants through private placement transaction (Note 3F) |  |  | 100 |  |  |  | - |
Issuance of convertible promissory notes and bifurcated conversion feature through private placement transaction (Note 3G) |  |  | 360 |  |  |  | - |
Issuance of convertible promissory note, bifurcated conversion and redemption features and detachable warrants through private placement transaction (Note 3H) |  |  | 4,000 |  |  |  | - |
Net proceeds received from underwritten U.S. public offering |  |  | - |  |  |  | 8,730 |
Net cash provided by financing activities |  |  | 4,960 |  |  |  | 8,730 |
Effect of exchange rate changes on cash and cash equivalents, and restricted cash |  |  | (11 | ) |  |  | (17 | )
Change in cash and cash equivalents, and restricted cash |  |  | (4,146 | ) |  |  | 4,566 |
Cash and cash equivalents, and restricted cash at beginning of the period |  |  | 4,502 |  |  |  | 2,331 |
Cash and cash equivalents, and restricted cash, end of period |  | $ | 356 |  |  | $ | 6,897 |
Supplemental disclosure of cash flow activities: |  |  |  |  |  |  |  |
(a) Net cash (received) paid during the year for: |  |  |  |  |  |  |  |
Interest |  | $ | (37 | ) |  | $ | - |
(b) Non-cash investment and financing activities: |  |  |  |  |  |  |  |
Deemed dividend upon trigger of down round protection |  | $ | - |  |  | $ | 855 |
Recognition of right for use asset against a lease liability (Note 3C) |  | $ | 79 |  |  | $ | - |
Issuance of shares and warrants as settlement of financial liabilities (Note 3I and Note 3J) |  | $ | 238 |  |  | $ | - |

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

7

GLUCOTRACK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of US Dollars, except share and per share data)

NOTE 1 - GENERAL

A. | Glucotrack Inc. (the “Company”) was incorporated on May 18, 2010 under the laws of the State of Delaware. The Company is a medical device company, focused on development of an Implantable Continuous Glucose Monitor (CGM) for persons with Type 1 diabetes and insulin-dependent Type 2 diabetes (the “Glucotrack CBGM Product”).
B. | Liquidity and capital resources
| To date, the Company has not yet commercialized the Glucotrack CBGM Product. Further development and commercialization efforts are expected to require substantial additional expenditure. Therefore, the Company is dependent upon external sources for financing its operations. As of September 30, 2024, the Company has incurred an accumulated deficit of $122,356. in addition, the Company has generated operating losses and negative operating cash flow for all reported periods. As of September 30, 2024, the balance of cash and cash equivalents amounted to $346, together with the net proceeds in total amount of $8,873 which expected to be received upon closing of a public offering through registration statements on Form S-1 (see also Note 6 below) on November 14, 2024.
| During the year ended December 31, 2023, the Company raised net proceeds of $8,730 through completion of underwritten public offering. Moreover, during the period of nine months ended September 30, 2024, the Company entered into (i) exchange agreement with certain shareholders under which warrants with down round protection feature have been exchanged into shares of common stock in order to facilitate its equity structure (see also Note 3B below), (ii) private placement agreement under which the Company raised proceeds of $500 (see also Note 3D below), (iii) unsecured promissory notes and warrant agreements under which the Company raised proceeds of $100 (see also Note 3F below), (iv) unsecured promissory notes under which the Company raised proceeds of $360 (see also Note 3G below), (v) secured promissory note and warrant agreements under which the Company raised proceeds of $4,000 (see also Note 3H below) and (vi) conversion agreements under which certain financial liabilities have been settled for issuance of shares of common stock and warrants of the Company (see also Note 3I and Note 3J below). The Company plans to finance its operations through the sale of equity securities (including shelf registration statement on Form S-3 was declared effective on October 3, 2023 by the Securities and Exchange Commission (SEC) which allows the Company to register up to $30,000 of certain equity and/or debt securities of the Company through prospectus supplement) and/or debt securities. There can be no assurance that the Company will succeed in obtaining the necessary financing or generating sufficient revenue from sale of its Glucotrack CBGM Product in order to continue its operations as a going concern. Management has considered the significance of such conditions in relation to the Company’s ability to meet its current obligations and to achieve its business targets and determined that these conditions raise substantial doubt about the Company’s ability to continue as a going concern. The condensed interim consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

8

GLUCOTRACK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of US Dollars)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. | Basis of Presentation

| The accompanying unaudited condensed interim consolidated financial statements and related notes should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2023, as was filed with the Securities and Exchange Commission (“SEC”) on March 28, 2024. The unaudited condensed interim consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC related to interim financial statements. As permitted under those rules, certain information and footnote disclosures normally required or included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are considered necessary to present fairly the results of the Company’s financial position and operating results for the interim periods. All such adjustments are of a normal recurring nature.
| The results for the period of three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other interim period or for any future period.

B. | Use of Estimates in the Preparation of Financial Statements

| The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. As applicable to these interim financial statements, the most significant estimates and assumptions include identification and measurement of financial instruments.

C. | Principles of Consolidation

| The condensed interim consolidated financial statements include the accounts of the Company and its subsidiary. Significant intercompany balances and transactions have been eliminated in consolidation.

D. | Cash and Cash Equivalents

| Cash equivalents are short-term highly liquid investments which include short-term bank deposits (up to three months from date of deposit), that are not restricted as to withdrawals or use that are readily convertible to cash with maturities of three months or less as of the date acquired.

E. | Modification of equity-classified contracts

| The modification or exchange of equity-classified contracts, such as warrants that were classified as equity before the modification or exchange and remained eligible for equity classification after the modification, is accounted for in a similar manner to a modification of stock-based compensation. Accordingly, the incremental fair value from the modification or exchange (the change in the fair value of the instrument before and after the modification or exchange) is recognized as a reduction of retained earnings of increase of accumulated deficit as a deemed dividend. Modifications or exchanges that result in a decrease in the fair value of an equity-classified share-based payment awards are not recognized. In addition, the amount of the deemed dividend is also recognized as an adjustment to earnings available to common shareholders for purposes of calculating earnings per share.

9

GLUCOTRACK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of US Dollars)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

F. | Convertible Promissory Notes

| Upon initial recognition of convertible promissory notes and similar instruments, the Company considers the provisions of ASC 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Equity” (“ASC 815-40”) in order to determine whether the conversion features embedded within the convertible instrument should be separated from the host instrument. When it is determined that an embedded derivative required to be bifurcated (such as embedded conversion feature that does not qualify for equity classification), the Company recognized the embedded derivative bifurcated as a separate derivative liability upon initial recognition and on subsequent periods at fair value. The remaining consideration amount received or allocated to the entire convertible instrument is allocated to the host debt instrument. The difference between the face value of the host and such an allocated amount represents a discount which is amortized as finance expense to profit or loss using an effective interest method over the term of the note until its stated maturity. When it is determined that the embedded conversion feature qualifies for equity classification (such when the embedded conversion option, if it were freestanding, is not qualified as a derivative in accordance with the provisions of ASC 815-10, “Derivatives and Hedging” since its terms did not require or permit net settlement or when the embedded conversion option is indexed to the entity’s own stock), the conversion option is not bifurcated. When bifurcation is not required, the Company considers whether the debt instrument involves a significant premium (i.e. when the proceeds received or allocated upon issuance exceed the principal amount that will be paid at maturity). When it is determined that a substantial premium exists, the entire premium is allocated to paid-in capital and when it is determined, otherwise no additional accounting is required and the convertible promissory note is accounted for at amortized cost using effective interest method over the term of the note until its stated maturity.

G. | Allocation of proceeds and related issuance costs
| When multiple instruments are issued in a single transaction (package issuance), the total net proceeds from the transaction are allocated among the individual freestanding instruments identified. The allocation occurs after identifying all freestanding instruments and the subsequent measurement basis for those instruments. Financial instruments that are required to be subsequently measured at fair value (such as derivative liabilities) are measured at fair value and the remaining consideration is allocated to other financial instruments that are not required to be subsequently measured at fair value (such as liabilities measured at amortized cost, common shares and warrants eligible for equity classification), based on the relative fair value basis for such instruments. Issuance costs allocated to financial instruments that are required to be subsequently measured at fair value immediately expensed. Issuance costs allocated to shares and warrants classified as equity components and are recorded as a reduction of additional paid-in capital. Issuance costs allocated to financial liabilities measured at amortized cost are recorded as a discount and accreted over the contractual term of the financial instrument using the effective interest method.

10

GLUCOTRACK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of US Dollars)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

H. | Warrants

| Certain warrants that were issued to several holders are classified as a component of permanent equity since they are freestanding financial instruments that are legally detachable and separately exercisable, do not embody an obligation for the Company to repurchase its own shares, and permit the holders to receive a fixed number of Ordinary Shares upon exercise for a fixed exercise price and thus, are considered as indexed to the Company’s own shares. As such warrants were issued together with financial instruments that are not subsequently measured at fair value and the warrants were measured based on allocation of the proceeds received by the Company in accordance with the relative fair value basis. When applicable, direct issuance expenses that were allocated to certain warrants were deducted from additional paid-in capital.

I. | Leases

| The Company applies ASC Topic 842, “Leases” (“ASC 842”) under which the Company determines if an arrangement is a lease at inception. Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: (i) the lease transfers ownership of the asset by the end of the lease term, (ii) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (iii) the lease term is for a major part of the remaining useful life of the asset, (iv) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset, or (v) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of lease term. A lease is classified as an operating lease if it does not meet any one of these criteria. Since all the Company’s lease contracts for premises do not meet any of the criteria above, the Company concluded that all its lease contracts should be classified as operating leases. Right of Use (“ROU”) assets and liabilities are recognized on the commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company’s leases do not provide an implicit rate, the Company uses its Incremental Borrowing Rate (“IBR”) based on the information available on the commencement date in determining the present value of lease payments. The Company’s IBR is estimated to approximate the interest rate for collateralized borrowing with similar terms and payments and in economic environments where the leased asset is located. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. Moreover, the ROU asset may also include initial direct costs, which are incremental costs of a lease that would not have been incurred if the lease had not been obtained. The Company uses the long-lived assets impairment guidance in ASC 360-10, “Property, Plant, and Equipment - Overall”, to determine whether a ROU asset is impaired, and if so, the amount of the impairment loss to recognize. Certain leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain that the Company will exercise that option. An option to terminate is considered unless it is reasonably certain that the Company will not exercise the option.

11

GLUCOTRACK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of US Dollars)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

J. | Basic and diluted loss per share

| Basic loss per share is computed by dividing the loss for the period applicable (after considering the effect of deemed dividend related to trigger of down round protection feature) for Common Stockholders by the weighted average number of shares of Common Stock outstanding and shares of Common Stock to be issued upon achievement of certain performance milestones during the period and upon exercise of pre-funded warrants. In computing, diluted loss per share, basic earnings per share are adjusted to reflect the potential dilution that could occur upon the exercise of options or warrants issued or granted using the “treasury stock method” and using the if-converted method with respect to certain convertible promissory notes and bifurcated redemption feature accounted for as derivative financial liability, if the effect of each of such financial instruments is dilutive. In computing diluted loss per share, the average stock price for the period is used in determining the number of Common Stock assumed to be purchased from the proceeds to be received from the exercise of stock options or stock warrants. Shares to be issued upon exercise of all options and warrants, convertible promissory notes and bifurcated redemption feature, have been excluded from the calculation of the diluted net loss per share for all the reported periods for which net loss was reported because the effect of the common shares issuable as result of the exercise or conversion of these instruments was anti-dilutive.
| The net loss and the weighted average number of shares of Common Stock used in computing basic and diluted net loss per Common Stock for the period of three and nine months ended September 30, 2024 and 2023, is as follows:

SCHEDULE OF ANTIDILUTIVE NET LOSS AND WEIGHTED AVERAGE

|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  | US dollars (except share data) |  |  | US dollars (except share data) |
|  | Three-month period ended September 30, |  |  | Nine-month period ended September 30, |
|  | (Unaudited) |  |  | (Unaudited) |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Numerator: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net loss |  | $ | 5,087 |  |  | $ | 2,223 |  |  | $ | 12,503 |  |  | $ | 4,685 |
Deemed dividend related to trigger of down round protection feature |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 855 |
Net loss attributable to common stockholders |  | $ | 5,087 |  |  | $ | 2,223 |  |  | $ | 12,503 |  |  | $ | 5,540 |
Denominator: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Shares of Common Stock used in computing basic and diluted net loss per common stock |  |  | 5,564,880 |  |  |  | 4,593,733 |  |  |  | 5,340,532 |  |  |  | 3,758,590 |
Shares of Common Stock to be issued upon exercise of pre-funded warrants |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 241,246 |
Shares of Common Stock to be issued upon achievement of performance milestones |  |  | 30,000 |  |  |  | - |  |  |  | 15,275 |  |  |  | 6,691 |
Weighted average number of Common Stock outstanding used in computing basic and diluted net loss per share |  |  | 5,594,880 |  |  |  | 4,593,733 |  |  |  | 5,355,806 |  |  |  | 4,006,527 |
Basic and diluted net loss per common stock |  | $ | (0.91 | ) |  | $ | (0.49 | ) |  | $ | (2.39 | ) |  | $ | (1.38 | )

12

GLUCOTRACK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONT.)

(in thousands of US Dollars)

NOTE 3 - SIGNIFICANT TRANSACTIONS

A. | Exercise of pre-funded warrants

| On January 3, 2024, 395,294 pre-funded warrants granted through underwritten public offering in April 2023 have been fully exercised into the same number of shares of Common Stock of the Company.

B. | Exchange Agreement

| On February 13, 2024, the Company entered into an Exchange Agreement with certain warrant holders (the “Holders”), pursuant to which the Company and the Holders agreed to exchange (the “Exchange”) warrants with down round protection feature exercisable to common shares (the “Warrants”) owned by the Holders for shares of Common Stock to be issued by the Company. On February 15, 2024, 718,641 shares of Common Stock have been issued in exchange for 876,391 Warrants (the “Shares”).
| It was also agreed that the Holders will not, during the period (“Lock-Up Period”) (i) offer, pledge, announce the intention to sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Shares, (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Shares of, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Shares or such other securities, in cash or otherwise, (iii) make any demand for or exercise any right with respect to, the registration of any Shares or any security convertible into or exercisable or exchangeable for shares of common stock, or (iv) publicly announce an intention to effect any transaction specific in clause (i), (ii) or (iii) above, provided that the Holder, during the Lock-Up Period, may (a) sell or contract to sell Shares at a price higher than $0.50 per Share on any trading day up to 10% of the daily volume of Shares or (b) sell or contract to sell Shares at a price higher than $0.80 per Share on any trading day with no volume limitation. The Lock-Up Period shall expire at the earliest of (i) 365 days after the date hereof or (ii) until the Shares traded above $1.00 per Share for five consecutive trading days. The Company accounted for the Exchange of the aforesaid warrants with shares as deemed dividend which was calculated at the closing date by the management using the assistance of external appraiser as the excess of fair value of the share to be issued after taking into consideration a discount for lack of marketability at a rate of 16.81% over the Lock-Up Period over the fair value of the original equity instrument (i.e. warrants which included down round protection feature). However, since the fair value of the new equity instrument (common shares) was estimated as lesser than the fair value of the replaced equity instrument, deemed dividend was not recorded.

C. | Lease Agreement

| On February 19, 2024, the Company entered into Lease Agreement (the “Agreement”) with Tapsak Enterprises LLC dba Virginia Analytical (the “Landlord”) under which it was agreed that the Company will lease from the Landlord a premises located in Front Royal, Virginia area for a monthly rental fee of $2.5 over a period of 3-years commencing March 1, 2024 through February 28, 2027 (the “Initial Lease Period”). Security deposit of $2.5 which represents payment of one month is held by the Landlord which will be return to the Company at the end of the Initial Lease Period.
| In addition, the Company has an option to renew the Initial Lease Period for another two additional periods of 3-years each following the Initial Lease Period (the “Option Term”), following advanced notice as defined in the Agreement. The monthly rental fee over the Option Term shall be the fair market rate determined as what is a comparable cost for similar property in Front Royal, Virginia area. In accordance with the provision of ASC 842, Leases, at the commencement date of the Agreement, the Company recognized the right to use asset equals to lease liability in total amount of $79. The lease liability was measured at the present value of the future lease payments, which are discounted based on an estimate of the incremental interest rate that the Company would be required to pay to borrow a similar amount for a similar period in order to obtain a similar amount on the initial recognition date of the lease. As part of the leasing period, the Company considered only the Initial Lease Period as the realization of the option to extend the period was not considered as reasonably certain.

13

GLUCOTRACK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONT.)

(in thousands of US Dollars)

NOTE 3 - SIGNIFICANT TRANSACTIONS (CONT.)

C. | Lease Agreement (Cont.)

Operating lease:

SCHEDULE OF OPERATING LEASE

|  | September 30, 2024 |
Operating right-of-use asset |  | $ | 65 |
Current operating lease liability |  | $ | 25 |
Non-Current operating lease liability |  | $ | 40 |

Maturity analysis of the Company’s lease liability:

SCHEDULE OF MATURITY ANALYSIS OF LEASE LIABILITY

|  | September 30, 2024 |
Less than one year |  | $ | 30 |
Between 1-2 years |  |  | 30 |
More than 2 years |  |  | 13 |
Total operating lease payments |  | $ | 73 |
Less: imputed interest |  | $ | 8 |
Present value of lease liabilities |  | $ | 65 |

Additional information on lease

The following is a summary of the weighted average remaining lease terms and discount rate for the lease:

SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATE

|  | September 30, 2024 |
Lease term (years) |  |  | 2.42 |
Weighted average discount rate |  |  | 9.03 | %

D. | Private Placement Agreement

| On April 22, 2024, the Company entered into a private placement agreement under which the Company issued 79,366 shares of its common stock at a price of $6.30 per share for aggregate gross proceeds of $500 (the “Offering”). The Offering included participation of certain members of the Company’s executive management, Board of Directors and existing shareholders.

E. | Adoption of 2024 Equity Incentive Plan and Reverse Share Split

| On April 26, 2024, the Company held its Annual Meeting of Shareholders (the “Annual Meeting”) under which the Company’s stockholders approved, inter alia, the following proposals: (i) adoption of the Company’s 2024 Equity Incentive Plan and (ii) an amendment to Article IV of the Company’s Certificate of Incorporation, to effect a reverse stock split of the Company’s Common Stock at a ratio of between one-for-five and one-for-thirty, with such ratio to be determined at the sole discretion of the Board of Directors. Following the Annual Meeting, on April 30, 2024, the Company’s Board of Directors approved a one-for-five reverse stock split of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”). On May 17, 2024, the Company filed a Certificate of Amendment to the Company’s Certificate of Incorporation with the Secretary of State of the State of Delaware which effected the Reverse Stock Split. For accounting purposes, all shares, options and warrants to purchase shares of common stock and loss per share amounts have been adjusted to give retroactive effect to the Reverse Share Split for all periods presented in these interim consolidated financial statements. Any fractional shares resulting from the Reverse Share Split were rounded up to the nearest whole share.

14

GLUCOTRACK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONT.)

(in thousands of US Dollars)

NOTE 3 - SIGNIFICANT TRANSACTIONS (CONT.)

F. | Note and Warrant Purchase Agreements

| On June 27, 2024, the Company entered into note and warrant purchase agreements (the “Purchase Agreement”) with certain investors (the “June 27 Investors”), providing for the private placement of unsecured promissory notes in the aggregate principal amount of $100 (the “June 27 Notes” and each a “June 27 Note”) and warrants to purchase up to an aggregate of 300,000 shares of the Company’s Common Stock (the “June 27 Warrants”). The June 27 Notes bear simple interest at a rate of 3% per annum and are due and payable in cash on the earlier of: (a) 12 months from the date of the June 27 Note; or (b) the date the Company raises third-party equity capital in an amount equal to or in excess of $1,000 (the “Maturity Date”). The Company may prepay the June 27 Notes at any time prior to the Maturity Date without penalty. If an event of default occurs, the then-outstanding principal amount of the June 27 Notes plus any unpaid accrued interest will accelerate and become immediately payable in cash. Each of June 27 Warrants has an exercise price of $4.95 per share. The June 27 Warrants are immediately exercisable and have a 5-year term. Upon initial recognition, the management allocated the gross cash proceeds received based on the relative fair value of the June 27 Notes and the detachable June 27 Warrants in total amount of $15 and $85, respectively. The fair value of the June 27 Note was determined based on a rating model using a debt discount rate of 28.65% which represented the Company’s applicable rate of risk. The fair value of the June 27 Warrants was determined by using Black-Scholes pricing model taking into account, inter alia, expected stock price volatility of 245% and risk-free interest rate of 4.52%. The amount allocated to June 27 Warrants was classified as a component of permanent equity (as their terms permit the holders to receive a fixed number of shares of common stock upon exercise for a fixed exercise price). The June 27 Notes are accounted for as a financial liability measured at amortized cost. In subsequent periods, the Company recognized a discount and interest expense over the economic life of the June 27 Notes based on the effective interest rate method. The following tabular presentation reflects the reconciliation of the carrying amount of the June 27 Notes during the period of nine months ended September 30, 2024:

SCHEDULE OF RECONCILIATION OF THE CARRYING AMOUNT OF JUNE 27 NOTES

|  | Nine-month period ended September 30, 2024 |
|  | (Unaudited) |
Open balance |  | $ | - |
Total proceeds received |  |  | 100 |
Total proceeds allocated to June 27 Warrants at initial recognition |  |  | (85 | )
Discount amortization and interest expenses related to June 27 Notes (Note 5 below) |  |  | 16 |
Partial conversion June 27 Notes and accrued Interest (Note 3I and Note 3J below) |  |  | (26 | )
Ending balance |  | $ | 5 |

During the period commencing the issuance date through September 30, 2024, none of the June 27 Warrants have been exercised.

15

GLUCOTRACK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONT.)

(in thousands of US Dollars)

NOTE 3 - SIGNIFICANT TRANSACTIONS (CONT.)

G. | Convertible Promissory Notes

| On July 18, 2024, the Company entered into a series of convertible promissory notes with three directors, and one member of the Company’s executive management (the “July 18 Investors”), providing for the private placement of unsecured convertible promissory notes in the aggregate principal amount of $360 (the “July 18 Notes” and each a “July 18 Note”). The July 18 Notes bear simple interest at a rate of 8% per annum. Interest on the outstanding principal will accrue and, unless converted earlier as set forth below, be due and payable on (i) the 12-month anniversary of the date hereof, or (ii) the closing date of a Qualified Financing, as defined herein (the “Maturity Date”). Except regarding the conversion of the July 18 Notes as discussed below, the Company may not prepay the July 18 Notes without the written consent of the July 18 Investors. If not sooner repaid, all outstanding principal and accrued but unpaid interest on the July 18 Notes (the “July 18 Note Balance”), as of the close of business on the day immediately preceding the date of the closing of the next issuance and sale of capital stock of the Company, in a single transaction or series of related transactions, to investors resulting in gross proceeds to the Company of at least $500 (excluding indebtedness converted in such financing) (a “Qualified Financing”), will automatically be converted into that number of shares of equity securities of the Company sold in the Qualified Financing equal to the number of shares calculated by dividing (X) the July 18 Note Balance by (Y) an amount equal to the price per share or other unit of equity securities issued in such Qualified Financing, and otherwise on the same terms as the security issued in the Qualified Financing, provided that the conversion price per share shall not be lower than $1.56. Upon the occurrence of an Event of Default (as defined below), each July 18 Investors may, by written notice to the Company, declare the July 18 Note to be due immediately and payable with respect to the July 18 Note Balance. An “Event of Default” means (i) failure by the Company to pay the July 18 Note Balance on the Maturity Date, (ii) voluntary bankruptcy, or (iii) involuntary bankruptcy. Upon the occurrence of an Event of Default specified in clause (iii) above, the July 18 Note Balance shall automatically and immediately become due and payable, in all cases without any action on the part of any July 18 Investors. Upon initial date, the management measured the fair value of the embedded conversion feature which is accounted for as embedded derivative liability. The difference between the total gross cash proceeds received and the fair value of the embedded conversion feature is allocated to July 18 Notes that are measured at amortized cost under which in subsequent periods the Company recognizes a discount expense over the economic life of the July 18 Notes based on the effective interest rate method. However, the fair value of the embedded derivative liability related to the conversion feature was determined by the management at an insignificant amount since upon closing of a Qualified Financing the conversion will be done based on market conditions (i.e. conversion price will be equal to the fair value of the share upon conversion) and thus all proceeds received of $360 were allocated to the July 18 Notes. The following tabular presentation reflects the reconciliation of the carrying amount of the July 18 Notes during the period of nine months ended September 30, 2024:

SCHEDULE OF RECONCILIATION OF THE CARRYING AMOUNT OF JUNE 27 NOTES

|  | Nine-month period ended September 30, 2024 |
|  | (Unaudited) |
Open balance |  | $ | - |
Total proceeds allocated to July 18 Notes at initial recognition |  |  | 360 |
Interest expenses related to July 18 Notes (Note 5 below) |  |  | 5 |
Partial conversion July 18 Notes and accrued Interest (Note 3J below) |  |  | (101 | )
Ending balance |  | $ | 264 |

16

GLUCOTRACK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONT.)

(in thousands of US Dollars)

NOTE 3 - SIGNIFICANT TRANSACTIONS (CONT.)

H. | Convertible Promissory Note and Warrant Agreements

| On July 30, 2024, the Company entered into a convertible promissory note and three warrant agreements (the “July 30 Warrants”) with an existing investor (the “July 30 Holder”), providing for the private placement of a secured convertible promissory note in the aggregate principal amount of $4,000 (the “July 30 Note”). The July 30 Note is not convertible until and unless approved at a meeting of the Company’s stockholders (the “Stockholder Approval”).

The July 30 Note bears simple interest at a rate of 8% per annum and is due and payable in cash on earlier of: (i) 12 months anniversary of July 30 Note, or (ii) closing date of a Sale Transaction (defined below) (the “Maturity Date”). The July 30 Note is secured by a first-priority security interest on all Company’s assets.

Except regarding the conversion of the July 30 Note or a Sale Transaction as discussed below, the Company may not prepay the July 30 Note without the written consent of the July 30 Holder. If Stockholder Approval is obtained, the July 30 Note (i) is convertible at the discretion of the July 30 Holder at a price equal to the closing price of the Common Stock on the date of conversion and, (ii) if the Closing Price of the Common stock exceeds $5.00 per share for a period of 5 consecutive trading days, will automatically convert at a price equal to the 5 daily Volume Weighted Average Price (“VWAP”) of the Common Stock (subject to adjustment for any stock split, stock dividend, reverse stock split, combination or similar transaction).

Upon Sale Transaction on or prior to the Maturity Date, the Company will repay the July 30 Holder, at the July 30 Holder’s election, as follows: (i) cash equal to 200% of the Note balance, or (ii) transaction consideration in the amount to be received by the Holder in such Sale Transaction if the July 30 Note was converted pursuant to an optional conversion. “Sale Transaction” means a merger or consolidation of the Company with or into any other entity, or a sale of all or substantially all of the Company’s assets, or any other transaction or series of related transactions in which the Company’s stockholders immediately prior to such transaction(s) receive cash, securities or other property in exchange for their shares and, immediately after such transaction(s), own less than 50% of the equity securities of the surviving corporation or its parent.

Upon the occurrence of an Event of Default (defined below), the July 30 Holder may, by written notice to the Company, declare the Note to be due immediately and payable with respect to the July 30 Note balance. An “Event of Default” means (i) failure by the Company to pay the July 30 Note balance on the Maturity Date, (ii) the Company becomes subject to a judgement of more than $50,000, (iii) voluntary bankruptcy, or (iv) involuntary bankruptcy. Upon the occurrence of an Event of Default specified in clause (iii) above, the July 30 Note balance shall automatically and immediately become due and payable, in all cases without any action on the part of the July 30 Holder.

Each July 30 Warrant becomes exercisable 12 months after its issuance and has term of 10 years. The July 30 Warrants are exercisable for cash only and have no price-based antidilution. The first July 30 Warrant is for 2,133,334 shares at $1.875 per share. The second July 30 Warrant is for 1,523,810 shares at $2.625 per share. The third July 30 Warrant is for 1,185,186 shares at $3.375 per share.

At the initial date, the Company has issued two instruments that include (i) a financial instrument that is considered as “host” which comprised of July 30 Note and two embedded derivative financial instruments (i.e. an embedded conversion feature and an embedded redemption feature to receive cash equals to 200% of July 30 Note balance upon Sale Transaction) and (ii) three series of detachable warrants. At the initial date, the Company is required to estimate the fair value of both two instruments and allocate the total gross proceeds received between them based on that relative fair value identified. The fair value of the embedded derivative financial instruments (i.e. the conversion right and the redemption right) should be bifurcated from the host instrument and remeasured on recurring basis at each reporting period under marked to market approach, the July 30 Note is accounted for under carrying amount whereby discount and interest expenses are recorded over the economic life of the July 30 Note based on the effective interest rate method and the July 30 Warrants are classified into equity without any further subsequent measurement.

17

GLUCOTRACK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONT.)

(in thousands of US Dollars)

NOTE 3 - SIGNIFICANT TRANSACTIONS (CONT.)

H. | Convertible Promissory Note and Warrant Agreements (Cont.)
| Upon initial recognition, the management by using the assistance of an external appraiser allocated the gross cash proceeds received based on the relative fair value of the July 30 Note and the detachable July 30 Warrants in total amount of $1,450 and $2,550, respectively. The fair value of the convertible note was determined by using hybrid method that includes conversion scenario and liquidation scenario taking into account, inter alia, a debt discount rate of 28.65%. The fair value of the July 30 Warrants was determined by using Black-Scholes pricing model taking into account, inter alia, expected stock price volatility of 122.8% and risk-free interest rate of 4.78%. The amount allocated to July 30 Warrants was classified as a component of permanent equity (as their terms permit the holders to receive a fixed number of shares of common stock upon exercise for a fixed exercise price). Furthermore, it was determined that the embedded conversion feature and embedded redemption feature are required to be bifurcated from the host loan instrument. The fair value of the bifurcated derivatives was determined by the management using the assistance of an external appraiser in a total amount of $35 upon initial recognition and in subsequent periods as derivative liability at fair value through profit and loss. The remaining amount of $1,415 was allocated to the host loan instrument which in subsequent periods is accounted for using the effective interest method over the term of the loan, until its stated maturity. The following tabular presentation reflects the reconciliation of the carrying amount of the July 30 Note during the period of nine months ended September 30, 2024:

SCHEDULE OF RECONCILIATION OF THE CARRYING AMOUNT OF JULY 30 NOTES

|  | Nine-month period ended September 30, 2024 |
|  | (Unaudited) |
Open balance |  | $ | - |
Total proceeds received |  |  | 4,000 |
Total proceeds allocated to July 30 Warrants at initial recognition |  |  | (2,550 | )
Total proceeds allocated to embedded redemption feature at initial recognition |  |  | (35 | )
Amortization of discount and interest expenses related to July 30 Note (Note 5 below) |  |  | 309 |
Ending balance |  | $ | 1,724 |

The following tabular presentation reflects the reconciliation of the fair value of the embedded conversion feature and embedded redemption feature during the period of nine months ended September 30, 2024:

SCHEDULE OF RECONCILIATION OF FAIR VALUE OF EMBEDDED CONVERSION FEATURE

|  | Nine-month period ended September 30, 2024 |
|  | (Unaudited) |
Open balance |  | $ | - |
Proceeds allocated to embedded redemption feature at initial recognition |  |  | 35 |
Revaluation expenses related to embedded redemption feature (Note 5 below) |  |  | 2 |
Ending balance |  | $ | 37 |

On September 24, 2024, the Company held a special meeting of its stockholders under which shares of common stock issuable by the Company upon conversion of the July 30 Note and exercise of the July 30 Warrants has been approved. However, through September 30, 2024, July 30 Holder has not elected to trigger the conversion of July 30 Note or the exercise of the July 30 Warrants into shares of common stock.

18

GLUCOTRACK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONT.)

(in thousands of US Dollars)

NOTE 3 - SIGNIFICANT TRANSACTIONS (CONT.)

I. | August 23 Conversion
| On August 23, 2024 (the “Commitment Date”), the Company and two of June 27 Investors entered into conversion agreement, under which the Company agreed to convert the principal nominal amount plus any accrued but unpaid interest pursuant to each of June 27 Notes, totalling approximately $20 each (the “Debt”), held by the Investors to Common Stock at a conversion price of $1.02 per share. On October 15, 2024, the Company issued 19,682 shares of common stock for each of the two of the June 27 Investors in respect of each respective Debt converted. In satisfaction of the Debt, the Company also issued to each of the two June 27 Investors three warrants (each an “August 23 Warrant”). Each August 23 Warrant becomes exercisable on August 16, 2025 and has term of 10 years. The August 23 Warrants are exercisable for cash only and have no price-based antidilution. The first August 23 Warrant is for 10,707 shares of Common Stock and is exercisable at $1.875 per share. The second August 23 Warrant is for 7,648 shares of Common Stock, exercisable at $2.625 per share. The third August 23 Warrant is for 5,948 shares of Common Stock, exercisable at $3.375 per share. The above transaction was accounted for as settlements of financial liabilities under which the instruments issued or to be issued to the June 27 Investors (i.e. shares of common stock and August 23 Warrants) are eligible for equity classification and thus both have been recorded as part of the permanent equity based on the total fair value of $238 at the Commitment Date. The difference between the fair value of these equity instruments and the carrying amount of each of the respective Debt at the Commitment Date amounted to $11 was charged immediately to the finance expenses (see also Note 5 below). During the period commencing the issuance date through September 30, 2024, none of the August 23 Warrants have been exercised.

J. | Sep 5 Conversion
| On September 5, 2024 (the “Commitment Date”), the Company and one of June 27 Investors and July 18 Investors entered into a conversion agreement, under which the Company agreed to convert outstanding board fees amounted $113 and the principal nominal amount plus any accrued but unpaid interest pursuant to June 27 Note and July 18 Note, totalling $146 (referring together as a “Debt”), held by the Investor to Common Stock at a conversion price of $1.02 per share. On October 15, 2024, the Company issued 254,226 shares of common stock for the June 27 Investor in respect of the Debt converted. In satisfaction of the Debt, the Company also issued to June 27 Investor and July 18 Investor three warrants (each an “September 5 Warrant”). Each September 5 Warrant becomes exercisable on August 16, 2025 and has term of 10 years. The September 5 Warrants are exercisable for cash only and have no price-based antidilution. The first September 5 Warrant is for 138,299 shares of Common Stock and is exercisable at $1.875 per share. The second September 5 Warrant is for 98,785 shares of Common Stock, exercisable at $2.625 per share. The third September 5 Warrant is for 76,833 shares of Common Stock, exercisable at $3.375 per share. The above transaction was accounted for as settlements of financial liabilities under which the instruments issued or to be issued to the July 18 Investor (i.e. shares of common stock and September 5 Warrants) are eligible for equity classification and thus both have been recorded as part of permanent equity based on the total fair value of $1,505 at the Commitment Date. The difference between the fair value of these equity instruments and the carrying amount of the Debt at the Commitment Date amounted to $227 was charged immediately to the finance expenses (see also Note 5 below). During the period commencing the issuance date through September 30, 2024, none of the September 5 Warrants have been exercised.

19

GLUCOTRACK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONT.)

(in thousands of US Dollars)

NOTE 4 - COMMITMENTS AND CONTINGENT LIABILITIES

A. | In 2004, the Israeli Innovation Authority (IIA) provided Integrity Israel with a grant of approximately $93 (NIS 420,000), for develop a non-invasive blood glucose monitor (the “Development Plan”). Integrity Israel is required to pay royalties to IIA at a rate ranging between 3-5% of the proceeds from sale of the Company’s products arising from the Development Plan up to an amount equal to $93, plus interest at LIBOR from the grant date. As to replacement of the LIBOR benchmark rate, even though the IIA has not declared the alternative benchmark rate to replace the LIBOR, the Company does not believe it will have a significant impact. As of September 30, 2024, the remaining contingent liability with respect to royalty payment on future sales equals approximately $73, excluding interest. Such contingent obligation has no expiration date.
B. | On October 7, 2022 (“the Closing Date”), the Company entered into Intellectual Property Purchase Agreement (the “Agreement”) with Paul Goode, which is the Company’s Chief Executive Officer (the “Seller”), under which it was agreed that on and subject to the terms and conditions of the Agreement, at the Closing Date, Seller sold and assigned to the Company, all of Seller’s right, title and interest in and to the following assets, properties and rights (collectively, the “Purchased Assets”): (i) all rights, title, interests in all current and future intellectual property, including, but not limited to patents, trademarks, trade secrets, industry know-how and other IP rights relating to an implantable continuous glucose sensor (collectively, the “Conveyed Intellectual Property”); and (ii) all the goodwill relating to the Purchased Assets.

| In consideration for the sale of the Purchased Assets to the Company, at the Closing Date, the Company paid to Seller cash in the amount of one dollar and obligated to issue up to 200,000 shares of Common Stock to be issued based upon specified performance milestones as set forth in the Agreement (the “Purchase Price”). In addition, if upon the final issuance, the aggregate 200,000 shares represent less than 1.5% of the then outstanding Common Stock of the Company, the final issuance will include such number of additional shares so that the total aggregate issuance equals 1.5% of the outstanding shares (the “True-Up Shares”). All shares of Common Stock of the Company that will be issued under the agreement shall be (i) restricted over a limited period as defined in the Agreement and (ii) subject to the lockup provisions. When the Company acquires net assets that do not constitute a business, as defined under ASU 2017-01 Business Combinations (Topic 805) Clarifying the Definition of a Business (such when there is no substantive process in the acquired entity) the transaction is accounted for as asset acquisition and no goodwill is recognized. The acquired In-Process Research and Development intangible asset (“IPR&D”) to be used in research and development projects which have been determined not to have alternative future use at the acquisition date, is expensed immediately. At the Closing Date, it was determined that the asset acquisition represents the purchase of IPR&D with no alternative future use. However, the achievement of each of the performance milestones is considered as a contingent event outside the Company’s control and thus the contingent consideration which is equal to the fair value of the Purchase Price as measured at the Closing Date will be recognized when it becomes probable that each target will be achieved within the reasonable period. Such additional contingent consideration will be recognized in subsequent periods if and when the contingency (the achievement of targets) is resolved. In June 2023, the Company achieved the first performance milestone out of the five performance milestones outlined in the Agreement executed between the Company and the Seller as of the Closing Date. As a result, upon the date of the fulfilment of the first performance milestone the Company was committed to issue 20,000 restricted shares to the Seller. Accordingly, the Company recorded an amount of $131 as research and development expenses with a similar amount as an increase to additional paid-in capital. The first performance milestone shares were issued on February 6, 2024.

| In May 2024, the Company achieved the second performance milestone out of the five performance milestones outlined in the Agreement executed between the Company and the Seller as of the Closing Date. As result, the Company is committed to issue 30,000 restricted shares to the Seller. Accordingly, the Company recorded stock-based compensation expenses amounted to $192 which represents the quoted price of its Common Stock at the Closing Date, after taking into consideration a discount for lack of marketability in a rate of 30 % over the applicable restriction period. As of September 30, 2024, the second performance milestone shares were not yet issued. As of September 30, 2024, the achievement of all other remaining performance milestones was not considered probable and thus no stock-based compensation expenses were recorded with respect to thereof.

20

GLUCOTRACK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONT.)

(in thousands of US Dollars)

NOTE 5 - FINANCE (INCOME) EXPENSES, NET

SCHEDULE OF FINANCE EXPENSES

|  | Three-month period ended September 30, |  |  | Nine-month period ended September 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  | Unaudited |  |  | Unaudited |
Discount amortization and interest expenses related to June 27 Notes |  | $ | 16 |  |  | $ | - |  |  | $ | 16 |  |  | $ | - |
Interest expenses related to July 18 Notes |  |  | 5 |  |  |  | - |  |  |  | 5 |  |  |  | - |
Discount amortization and interest expenses related to July 30 Note |  |  | 309 |  |  |  | - |  |  |  | 309 |  |  |  | - |
Revaluation expenses related to derivative financial liabilities |  |  | 2 |  |  |  | - |  |  |  | 2 |  |  |  | - |
Revaluation expenses incurred from settlement of financial liabilities |  |  | 1,505 |  |  |  | - |  |  |  | 1,505 |  |  |  | - |
Interest on bank deposits |  |  | (7 | ) |  |  | (1 | ) |  |  | (38 | ) |  |  | (2 | )
Exchange rate differentials, bank commissions and miscellaneous |  |  | 18 |  |  |  | - |  |  |  | 23 |  |  |  | - |
Finance (income) expenses, net |  | $ | 1,848 |  |  | $ | (1 | ) |  | $ | 1,822 |  |  | $ | (2 | )

NOTE 6 - SUBSEQUENT EVENTS

Management evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed interim consolidated financial statements were available to be issued. Based upon this review, the Company did not identify any other significant subsequent events that would have required adjustment or disclosure in the financial statements, except as disclosed below.

Completion of underwritten U.S. public offering

On November 12, 2024, the Company completed a public offering (the “Offering”) under which the Company received gross proceeds of $10,000 in exchange for issuance of an aggregate of (i) 2,437,340 shares (the “Shares”) of its Common Stock, (ii) 4,756,900 pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 4,756,900 shares of Common Stock (the “Pre-Funded Warrant Shares”) in lieu of Shares, (iii) Series A Warrants (the “Series A Warrants”) to purchase up to 7,194,240 shares of Common Stock (the “Series A Warrant Shares”) and (iv) Series B Warrants (the “Series B Warrants” and, together with the Series A Warrants, the “Common Warrants”) to purchase up to 7,194,240 shares of Common Stock (“the “Series B Warrant Shares” together with the Series A Warrant Shares, the “Warrant Shares”). Each Share or Pre-Funded Warrant, as applicable, was sold together with one Series A Warrant to purchase one share of Common Stock and one Series B Warrant to purchase one Common Share. The public offering price for each Share and accompanying Common Warrants was $1.39, and the public offering price for each Pre-Funded Warrant and accompanying Common Warrants was $1.389 (the “Offering Price”).

The Pre-Funded Warrants have an exercise price of $0.001 per share, are exercisable immediately and expire when exercised in full. Each Series A Common Warrant will have an exercise price per share of $1.81 and will be exercisable beginning on the date on which Stockholder Approval (as defined below) is received and deemed effective (the “Initial Exercise Date” or the “Stockholder Approval Date”). The Series A Warrants will expire on the five-year anniversary of the Initial Exercise Date. The Series B Warrants will have an exercise price per share of $1.81 and will be exercisable beginning on the Initial Exercise Date. The Series B Warrants will expire on the two and one-half year anniversary of the Initial Exercise Date. The issuance of Common Warrant Shares upon exercise of the Common Warrants is subject to stockholder approval under applicable rules and regulations of The Nasdaq Stock Market LLC (“Nasdaq”) (“Stockholder Approval” and the date on which Stockholder Approval is received and deemed effective, the “Stockholder Approval Date”).

The exercise price of Series A Warrants and Series B Warrants is subject to certain adjustments. If at the time of exercise there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Series A Warrants Shares and Series B Warrant Shares to the holders, then the Series A Warrants and Series B Warrants may also be exercised, in whole or in part, at such time by means of a “cashless exercise”. In addition, the holders are entitled to an option to require the Company to purchase the Series A Warrants and Series B Warrants for cash in an amount equal to their Black-Scholes Option Pricing Model value, in the event that certain fundamental transactions (which some of them are not considered solely within the control of the Company) as defined in the Series B Warrants agreement, occur. Additionally, holders of Series B Warrants may also effect an “alternative cashless exercise” at any time while the Series B Warrants are outstanding following the Initial Exercise Date. Under the alternate cashless exercise option, the holder of the Series B Warrant has the right to receive an aggregate number of shares equal to the product of (i) the aggregate number of shares of Common Stock that would be issuable upon a cashless exercise of the Series B Warrant and (ii) 3.0.

Total incremental and direct issuance costs are estimated at the total amount of $1,127.

The closing of the public offering occurred on November 14, 2024 (the “Closing Date”).

In a private placement offering completed concurrently with the completion of the public offering, the July 30 Investor voluntarily converted approximately $4,089 of Debt, which represents the outstanding minimal amount of principal and accrued interest under the July 30 Note as of November 12, 2024, on substantially the same terms as the public offering, resulting in the issuance of 2,640,717 shares of Common Stock (plus 2,640,717 accompanying Series A Warrants and 2,640,717 accompanying Series B Common Warrants), based on a conversion price of $1.55 per share.

21

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking statements include statements about our expectations, beliefs or intentions regarding our product development efforts, business, financial condition, results of operations, strategies and prospects. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q, including statements regarding our future activities, events or developments, including such things as future revenues, capital raising and financing, product development, clinical trials, regulatory approval, market acceptance, responses from competitors, capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, competitive strengths, goals, expansion and growth of our business and operations, plans, references to future success, projected performance and trends, and other such matters, are forward-looking statements. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “plan,” “may,” “will,” “could,” “would,” “should” and other similar words and phrases, are intended to identify forward-looking statements. The forward-looking statements made in this Quarterly Report on Form 10-Q are based on certain historical trends, current conditions and expected future developments as well as other factors we believe are appropriate in the circumstances. These statements relate only to events as of the date on which the statements are made and we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. All of the forward-looking statements made in this Quarterly Report on Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on us or our business or operations. Whether actual results will conform to our expectations and predictions is subject to a number of risks and uncertainties that may cause actual results to differ materially. Risks and uncertainties, the occurrence of which could adversely affect our business, include the risks identified under the caption “Risk Factors” included in our annual report on Form 10-K for the year ended December 31, 2023. The following discussion should be read in conjunction with the condensed consolidated financial statements and the notes thereto included in Item 1 of this Quarterly Report on Form 10-Q.

Overview

We are a medical device company focused on the design, development and commercialization of novel technologies for use by people with diabetes. We are currently developing an Implantable CBGM for those with Type 1 diabetes and insulin-dependent Type 2 diabetes.

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 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 Implantable CBGM. 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.

The Company is currently developing an Implantable CBGM for use by Type 1 diabetes patients as well as insulin-dependent Type 2 patients. Implant longevity is key to the success of such a device. We have 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. The Company has also successfully demonstrated continuous glucose sensing in the epidural space via two additional animal trials, both of which demonstrated a simple implant procedure, good functionality, and 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.

A regulatory submission has been made for a first in human study. This will be an acute study intended to demonstrate device performance and safety. All preparatory clinical activities are complete and the study is expected to initiate in Q4 2024, pending regulatory approval. In parallel, the Company is also preparing for a long-term clinical trial expected to begin in late Q2 2024. As part of this effort, the Company is working towards ISO13485 certification, an internationally agreed-upon standard of quality system requirements for the design, production, distribution, and sale of medical devices. The Company has successfully completed the first audit and is scheduled to complete the second audit in December 2024. A successful second audit results in certification of compliance to the standard, which is recognized and accepted by the FDA, the European Union, and many other geographies worldwide.

We believe our technology, if successful, has the potential to be more accurate, more convenient and have a longer duration than other implantable glucose monitors that are either in the market or currently under development.

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Our Senior Management team includes; CEO and President, Paul V. Goode PhD, who has a decorated career developing innovative medical technologies, including at Dexcom and MiniMed, CFO, James Cardwell, CPA who has over 16 years of experience as a Chief Financial Officer and Chief Operating Officer with a concentration in both SEC financial reporting and tax compliance, James P. Thrower PhD, Vice President of Engineering, a seasoned executive formerly of Sterling Medical Devices, Mindray DS USA and Dexcom, Inc., Mark Tapsak PhD, Vice President of Sensor Technology, a medical research scientist who brings over 25 years of experience in the diabetes industry, including previous senior roles at Dexcom and Medtronic, Drinda Benjamin, Vice President of Marketing, a medical device professional with over 20 years of experience in the medical device and diabetes industry with senior roles at Intuity Medical, Senseonics, Abbott Diabetes, and Medtronic Diabetes, Vincent Wong, Vice President of Quality, a medical device professional with 15 years of experience in quality system for implantable medical device manufacturing with senior roles at Cirtec Medical and TOMZ, and Sandie Martha, Vice President Clinical Operations, a medical device professional with over 20 years of experience in the medical device and diabetes industry with senior roles at Dexcom and GlySens.

Andy Balo, formerly of Dexcom and St Jude Medical (now Abbott) and John Ballantyne, founder and formerly of Aldeveron have joined as independent board members. Several highly talented and accomplished executives joined the Company as senior advisors to the Board. These include Daniel McCaffrey MBA MA, a world-renowned behavioral scientist and digital health expert formerly at Samsung Health and Dexcom, Inc., and Dr. David C. Klonoff, world renowned endocrinologist and diabetes technology thought leader. We intend to continue to invest in our talent and to expand and strengthen all areas within the Company.

Recent Events

On April 22, 2024, we entered into a private placement agreement under which we issued 79,366 shares of our common stock at a price of $6.3 per share for aggregate gross proceeds of $500,000 to certain members of our executive management, Board of Directors and existing shareholders.

On April 26, 2024, we held our Annual Meeting of Shareholders (the “Annual Meeting”) under which our stockholders approved, inter alia, the following proposals: (i) adoption of our 2024 Equity Incentive Plan; (ii) approved of an amendment to Article IV of our Certificate of Incorporation, as amended, to effect a reverse stock split of the Company’s Common Stock at a ratio of between one-for-five and one-for-thirty, with such ratio to be determined at the sole discretion of the Board of Directors. Following the Annual Meeting, on April 30, 2024, the Board of Directors approved a one-for-five reverse split of our issued and outstanding shares of Common Stock (the “Reverse Stock Split”). On May 17, 2024, we filed a Certificate of Amendment to the Company’s Certificate of Incorporation with the Secretary of State of the State of Delaware which effected the Reverse Stock Split.

On June 27, 2024, the Board of Directors approved us to enter into note and warrant purchase agreements with certain investors, providing for the private placement of unsecured promissory notes in the aggregate principal amount of $100,000 (the “Notes”) and warrants (the “Warrants”) to purchase up to an aggregate of 300,000 shares of our Common Stock. The closing of the private placement occurred on July 1, 2024. The Notes bear simple interest at the rate of 3% per annum and are due and payable in cash on the earlier of: (a) twelve months from the date of the Note; or (b) the date we raise third-party equity capital in an amount equal to or in excess of $1,000,000 (the “Maturity Date”). We may prepay the Notes at any time prior to the Maturity Date without penalty. If an event of default occurs, the then-outstanding principal amount of the Notes plus any unpaid accrued interest will accelerate and become immediately payable in cash. Each Warrant has an exercise price of $4.95 per share. The Warrants are immediately exercisable and have a five-year term.

On July 18, 2024, we entered into a series of convertible promissory notes with certain investors which including three of our directors and one member of our executive management, providing for the private placement of unsecured convertible promissory notes in the aggregate principal amount of $360,000 (the “Notes” and each a “Note”). The Notes bear simple interest at the rate of 8% per annum and are due and payable in cash on the earlier of: (a) the twelve-month anniversary of Note, or (b) the date of closing of a Qualified Financing (as defined above). Interest will be computed on the basis of a 365-day year.

On July 30, 2024, we entered into a convertible promissory note and three warrant agreements (the “Warrants”) with an existing investor (the “Holder”), providing for the private placement of a secured convertible promissory note in the aggregate principal amount of $4,000,000 (the “Note”). The Note was not convertible until and the approval at a meeting of our stockholders. The Note bears simple interest at the rate of 8% per annum and is due and payable in cash on the earlier of: (i) 12 months anniversary of Note, or (ii) the date of closing of a Sale Transaction (as defined above) (the “Maturity Date”). The Note is secured by a first-priority security interest on all our assets. Each Warrant becomes exercisable 12 months after its issuance and has term of 10 years. The Warrants are exercisable for cash only and have no price-based antidilution. The first Warrant is for 2,133,334 shares at $1.875 per share. The second Warrant is for 1,523,810 shares at $2.625 per share. The third Warrant is for 1,185,186 shares at $3.375 per share.

On August 23, 2024, two of the June 27 Investors entered into conversion agreements with us, pursuant to which we agreed to convert the principal amount, plus any accrued but unpaid interest pursuant to each of the June 27 Notes, totalling approximately $20,076 each, held by the Investors to Common Stock at a conversion price of $1.02 per share. On October 15, 2024, we issued 19,682 shares of common stock for each of the two of the June 27 Investors in respect of each respective debt converted. In satisfaction of the debt, we also issued to each of the two June 27 Investors three warrants (each an “August 23 Warrant”). Each August 23 Warrant becomes exercisable on August 16, 2025 and has term of 10 years. The August 23 Warrants are exercisable for cash only and have no price-based antidilution. The first August 23 Warrant is for 10,707 shares of Common Stock and is exercisable at $1.875 per share. The second August 23 Warrant is for 7,648 shares of Common Stock, exercisable at $2.625 per share. The third August 23 Warrant is for 5,948 shares of Common Stock, exercisable at $3.375 per share.

On September 5, 2024, one of the June 27 Investors and July 18 Investors entered into a conversion agreement with us, pursuant to which we agreed to convert outstanding board fees and the principal amount, plus any accrued but unpaid interest pursuant to the June 27 Investor’s June 27 Note, totalling $259,300, held by the Investor to Common Stock at a conversion price of $1.02 per share. On October 15, 2024, we issued 254,226 shares of common stock for the June 27 Investor in respect of the Debt converted. In satisfaction of the debt, we issued to the July 18 Investor three warrants (each an “September 5 Warrant”). Each September 5 Warrant becomes exercisable on August 16, 2025 and has term of 10 years. The September 5 Warrants are exercisable for cash only and have no price-based antidilution. The first September 5 Warrant is for 138,299 shares of Common Stock and is exercisable at $1.875 per share. The second September 5 Warrant is for 98,785 shares of Common Stock, exercisable at $2.625 per share. The third September 5 Warrant is for 76,833 shares of Common Stock, exercisable at $3.375 per share.

The summary of our significant accounting policies is included under Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations of our fiscal 2023 Form 10-K. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements. There have been no material changes to the critical accounting policies and estimates as filed in such report.

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Liquidity and Capital Resources

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

Since our incorporation, we have devoted substantially all our resources to research and product development and providing general and administrative support for these activities. Since our incorporation, we have incurred significant losses and negative cash flows from operations. During the nine months ended September 30, 2024, we incurred a net loss of approximately $12.5 million and used $9.0 million of cash in our operations. As of September 30, 2024, we had an accumulated deficit of approximately $122.7 million. We expect to continue to incur significant and increasing losses and do not expect positive cash flows from operations for the foreseeable future, and our net losses may fluctuate significantly from period to period depending on the timing of and expenditures on our research and development activities.

As of September 30, 2024, the balance of cash and cash equivalents of approximately $346,000, together with the net proceeds in total amount of $8,873 which expected to be received upon closing of a public offering through registration statements on Form S-1 on November 14, 2024, is insufficient for the Company to realize its business plans for the twelve-month period subsequent to the reporting period.

Results of Operations

The following discussion of our operating results explains material changes in our results of operations for the three and nine months ended September 30, 2024 compared with the same periods ended September 30, 2023. The discussion should be read in conjunction with the financial statements and related notes included elsewhere in this report.

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

Research and development expenses

Research and development expenses were approximately $2.1 million for the three-month period ended September 30, 2024, as compared to approximately $1.7 million for the prior-year period. The increase is attributable to ramping up product development actives.

Research and development expenses consist primarily of salaries and other personnel-related expenses, materials, animal trials, production labor and other expenses. We expect research and development expenses to increase in 2025 and beyond, primarily due to hiring additional personnel, as well clinical trials for the Glucotrack CBGM; however, we may adjust or allocate the level of our research and development expenses based on available financial resources and based on our commercial needs, including the FDA registration process, specific requirements from customers, development of new Glucotrack CBGM models and others.

Marketing expenses

Marketing expenses were approximately $0.1 million for the three-month period ended September 30, 2024, as compared to $0 for the prior-year period. This increase is primarily attributable to business development personnel and professional marketing services.

General and administrative expenses

General and administrative expenses were approximately $1.1 million for the three-month period ended September 30, 2024, as compared to approximately $0.5 million for the prior-year period. The increase is attributable to professional fees we accrued during the period.

General and administrative expenses consist primarily of professional services, salaries, consulting fees, insurance, travel expenses and other related expenses for executive, finance and administrative personnel, including stock-based compensation expenses. Other general and administrative costs and expenses include facility-related costs not otherwise included in research and development costs and expenses, and professional fees for legal and accounting services.

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Finance (income) expenses net

Finance expenses, net was approximately $1.9 million for the three-month period ended September 30, 2024, as compared to finance income of approximately $0.001 million for the prior-year period. This increase was primarily due to $1.5 million in revaluation expenses incurred from settlement of financial liabilities and $0.3 million in discount amortization and interest expenses.

Net Loss

Net loss was approximately $5.1 million for the three-month period ended September 30, 2024, as compared to approximately $2.2 million for the prior-year period. The increase in net loss is attributable primarily to the increase in our operating expenses, as described above.

Consolidated Results of Operations for the Nine Months Ended September 30, 2024 and 2023

Research and development expenses

Research and development expenses were approximately $7.8 million for the nine-month period ended September 30, 2024, as compared to approximately $3.0 million for the prior-year period. The increase is attributable to professional fees we accrued during the period.

Research and development expenses consist primarily of salaries and other personnel-related expenses, materials, animal trials and other expenses. We expect research and development expenses to increase in 2025 and beyond, primarily due to hiring additional personnel, as clinical trials for the Glucotrack CBGM; however, we may adjust or allocate the level of our research and development expenses based on available financial resources and based on our commercial needs, including the FDA registration process, specific requirements from customers, development of new Glucotrack CBGM models and others.

Marketing expenses

Marketing expenses were approximately $0.3 million for the nine-month period ended September 30, 2024, as compared to $0 for the prior-year period. This increase is primarily attributable to business development personnel and professional marketing services.

General and administrative expenses

General and administrative expenses were approximately $2.6 million for the nine-month period ended September 30, 2024, as compared to approximately $1.7 million for the prior-year period. The increase is attributable to professional fees we accrued during the period.

General and administrative expenses consist primarily of professional services, salaries, consulting fees, insurance, travel expenses and other related expenses for executive, finance and administrative personnel, including stock-based compensation expenses. Other general and administrative costs and expenses include facility-related costs not otherwise included in research and development costs and expenses, and professional fees for legal and accounting services.

Finance (income) expenses, net

Finance expenses, net was approximately $1.8 million for the nine-month period ended September 30, 2024, as compared to finance income, net of approximately $0.002 million for the prior-year period. This increase was primarily due to $1.5 million in revaluation expenses incurred from settlement of financial liabilities and $0.3 million in discount amortization and interest expenses.

Net Loss

Net loss was approximately $12.5 million for the nine-month period ended September 30, 2024, as compared to approximately $4.7 million for the prior-year period. The increase in net loss is attributable primarily to the increase in our operating expenses, as described above.

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

Operating Activities

Net cash used in operating activities for the nine-month period ended September 30, 2024 was approximately $9.0 million primarily due to the net loss of approximately $12.5 million offset by non-cash charges of $2.3 million and an increase in working capital excluding cash of $1.2 million. Net cash used in operating activities for the nine-month periods ended September 30, 2023 was approximately $4.1 million primarily due to the net loss of $4.7 million.

Investing Activities

Net cash used in investing activities was $0.1 million and $0 for the nine-month periods ended September 30, 2024 and 2023, respectively. Net cash used in investing activities primarily reflects the purchasing of fixed assets.

Financing Activities

Net cash provided by financing activities was approximately $5.0 million and $8.7 million for the nine-month periods ended September 30, 2024 and 2023, respectively. Net cash provided by financing activities primarily reflects the proceeds received from private placement transaction in 2024 versus net proceeds received upon completion of public offering.

Off-Balance Sheet Arrangements

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

Critical Accounting Policies

This 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. GAAP”). 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, expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our condensed 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. GAAP. 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.

Going Concern Uncertainty

The development of the implantable continuous glucose sensor product is expected to require substantial further expenditures. We remain dependent upon external sources for financing our operations. Since inception, we have incurred substantial accumulated losses and negative operating cash flow and have a significant accumulated deficit. We do not have any committed external source of funds or other support for our development efforts, and we cannot be certain that additional funding will be available on acceptable terms, or at all. Until we can generate sufficient revenue to finance our cash requirements, which we may never do, we expect to finance our future cash needs through a combination of public or private equity offerings, debt financings, collaborations, government funding, strategic alliances, licensing arrangements, and other marketing or distribution arrangements, any of which may include terms that may adversely affect our stockholders’ rights. If we are unable to raise additional capital in sufficient amounts or on acceptable terms, we may have to significantly delay, scale back or discontinue our development or commercialization initiatives. Any of the above events could significantly harm our business, prospects, financial condition and results of operations and cause the price of our common stock to decline. We believe that our cash on hand as of September 30, 2024, together with the net proceeds expected to be received upon closing of a public offering through registration statements on Form S-1 on November 14, 2024, will not provide sufficient working capital to fund its current operations and animal trial program for the development of its Implantable CGM for a period of twelve-months subsequent to the reporting period.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not required for smaller reporting companies.

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2024 (the “Evaluation Date”). Based on such evaluation, those officers have concluded that, as of the Evaluation Date, our disclosure controls and procedures are ineffective in recording, processing, summarizing and reporting, on a timely basis, information required to be included in periodic filings under the Exchange Act and that such information is not accumulated and communicated to management, including our principal executive and financial officers, in a manner sufficient to allow timely decisions regarding required disclosure, due to the material weaknesses in internal control over financial reporting related to lack of sufficient internal accounting personnel, segregation of duties, and lack of sufficient internal controls (including IT general controls) that encompass the Company as a whole with respect to entity and transactions level controls in order to ensure complete documentation of complex and non-routine transactions and adequate financial reporting.

Management has identified corrective actions to remediate such material weaknesses, which includes hiring additional employees and engaging in external financial reporting consultants. Management intends to implement procedures to remediate such material weaknesses during the fiscal year 2025; however, the implementation of these initiatives may not fully address any material weaknesses that we may have in our internal control over financial reporting.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time in the ordinary course of business, the Company may be subject to various claims, charges, and litigation. At September 30, 2024, except as described in the preceding paragraph, the Company did not have any pending claims, charges or litigation that were expected to have a material adverse impact on its financial position, results of operations or cash flows.

Item 1A. Risk Factors.

You should carefully consider the factors discussed in Part I, Item 1A., “Risk Factors” in our Annual Report for the fiscal year ended December 31, 2023, which could materially affect our business, financial position, or future results of operations. The risks described in our Annual Report for the fiscal year ended December 31, 2023, are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial position, or future results of operations. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC. The risk factor set forth below supplements and updates the risk factors previously disclosed and should be read together with the risk factors described in our Annual Report for the fiscal year ended December 31, 2023 and with any risk factors we may include in subsequent periodic filings with the SEC.

We may fail to select or capitalize on the most scientifically, clinically or commercially promising or profitable product candidates.

Given the current momentum for continuous glucose monitoring (“CGM”) in the diabetes market, we have announced our decision to reset our priorities, improve our commercial outlook and refine our business strategy to focus on our implantable CGM technology. Should our efforts to focus on CGM not be successful, we will need to further evaluate our business strategy and, as a result, our Board of Directors may decide that it is in the best interest of our stockholders to dissolve our Company and liquidate our assets or otherwise modify our strategy in the future. In this regard, we may, from time to time, focus our product development efforts on different product candidates or may delay, suspend or terminate the future development of a product candidate at any time for strategic, business, financial or other reasons. As a result of changes in our strategy, we have and may in the future change or refocus our existing product development, commercialization and manufacturing activities. This could require changes in our facilities and our personnel. Any product development changes that we implement may not be successful. In particular, we may fail to select or capitalize on the most scientifically, clinically or commercially promising or profitable product candidates. Our decisions to allocate our research and development, management and financial resources toward particular product candidates may not lead to the development of viable commercial products and may divert resources from better opportunities. Similarly, our decisions to delay or terminate product development programs may also prove to be incorrect and could cause us to miss valuable opportunities.

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Our failure to maintain compliance with Nasdaq’s continued listing requirements could result in the delisting of our Common Stock.

Our common stock is currently listed for trading on The Nasdaq Stock Market LLC. We must satisfy the continued listing requirements of Nasdaq, to maintain the listing of our common stock on The Nasdaq Stock Market LLC.

On May 26, 2023, we received notice from the Staff indicating that, based upon the closing bid price of our common stock for the prior 30 consecutive business days, we were not currently in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on Nasdaq as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”). We had 180 days from May 26, 2023, or through November 22, 2023, to regain compliance with the Bid Price Rule.

On November 24, 2023, we received a second letter from Nasdaq notifying the Company that it had been granted an additional 180 calendar days, or until May 20, 2024 (the “Extended Compliance Period”), to regain compliance with the Minimum Bid Price Requirement in accordance with Nasdaq Listing Rule 5810(c)(3)(A).

On May 21, 2024, we received a third letter from Nasdaq (the “Letter”) notifying us that it had not regained compliance with the Minimum Bid Price Requirement during the Extended Compliance Period. The Letter also notified us that our Form 10-Q for the period ended March 31, 2024, indicates that we no longer meet the $2,500,000 minimum stockholders’ equity requirement for continued listing set forth under Listing Rule 5550(b)(1) (the “Minimum Stockholders’ Equity Requirement”). Pursuant to Listing Rule 5810(d)(2), the failure to comply with the Minimum Stockholders’ Equity Requirement has become an additional and separate basis for delisting.

Because we were under review for failure to meet the Minimum Bid Price Requirement, we were not eligible to submit a plan to regain compliance. Accordingly, unless we would request an appeal of this determination by May 28, 2024, trading of our common stock would be suspended at the opening of business on May 30, 2024, and a Form 25-NSE would be filed with the Securities and Exchange Commission (the “SEC”). We timely requested a hearing before a Nasdaq Hearings Panel (the “Panel”). The hearing request would result in a stay of any suspension or delisting action pending the hearing. On August 5, 2024, we received the decision of the Panel, and they granted us an extension to November 18, 2024 to regain compliance with the Minimum Stockholders’ Equity Requirement.

On May 17, 2024, in order to regain compliance with the Minimum Bid Price Requirement, we filed a Certificate of Amendment to the Company’s Certificate of Incorporation with the Secretary of State of the State of Delaware which effected, as of 4:30 p.m. Eastern Time, on May 17, 2024, a one-for-five Reverse Stock Split of our issued and outstanding shares of Common Stock.

In the event that we are unable to regain and sustain compliance with all applicable requirements for continued listing on the Nasdaq, our Common Stock may be delisted from Nasdaq. If our Common Stock were delisted from Nasdaq, trading of our common stock would most likely take place on an over-the-counter market established for unlisted securities, such as the OTCQB or the Pink Market maintained by OTC Markets Group Inc. An investor would likely find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our common stock on an over-the-counter market, and many investors would likely not buy or sell our common stock due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or other reasons. In addition, as a delisted security, our common stock would be subject to SEC rules as a “penny stock,” which impose additional disclosure requirements on broker-dealers. The regulations relating to penny stocks, coupled with the typically higher cost per trade to the investor of penny stocks due to factors such as broker commissions generally representing a higher percentage of the price of a penny stock than of a higher-priced stock, would further limit the ability of investors to trade in our common stock. In addition, delisting would materially and adversely affect our ability to raise capital on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. For these reasons and others, delisting would adversely affect the liquidity, trading volume and price of our common stock, causing the value of an investment in us to decrease and having an adverse effect on our business, financial condition and results of operations, including our ability to attract and retain qualified employees and to raise capital.

We rely on third parties to manufacture and supply our product.

We do not own or operate manufacturing facilities for clinical or commercial production of Glucotrack CBGM, other than a prototype lab. We have no experience in medical device manufacturing and lack the resources and the capability to manufacture the Glucotrack CBGM on a commercial scale.

If our manufacturing partners are unable to produce our products in the amounts, timing or pricing that we require, we may not be able to establish a contract and obtain a sufficient alternative supply from another supplier on a timely basis and in the quantities or pricing we require. We expect to depend on third-party contract manufacturers for the foreseeable future.

Glucotrack CBGM does, and our future product candidates, if any, likely will require precise, high quality manufacturing. Any of our contract manufacturers will be subject to ongoing periodic unannounced inspections by the FDA and other non-U.S. regulatory authorities to ensure strict compliance with quality system regulations, including current good manufacturing practices and other applicable government regulations and corresponding standards. If our contract manufacturers fail to achieve and maintain high manufacturing standards in compliance with quality system regulations, we may experience manufacturing errors resulting in patient injury or death, product recalls or withdrawals, delays or interruptions of production or failures in product testing or delivery, delay or prevention of filing or approval of marketing applications for our products, cost overruns or other problems that could seriously harm our business.

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Any performance failure on the part of our contract manufacturers could delay clinical development or regulatory clearance or approval of our product candidates or commercialization of our future product candidates, depriving us of potential product revenue and resulting in additional losses. In addition, our dependence on a third-party for manufacturing may adversely affect our future profit margins. Our ability to replace an existing manufacturer may be difficult because the number of potential manufacturers is limited, and the FDA must approve any replacement manufacturer before it can begin manufacturing our product candidates. Such approval would require additional non-clinical testing and compliance inspections. It may be difficult or impossible for us to identify and engage a replacement manufacturer on acceptable terms in a timely manner, or at all.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a) Except as disclosed below, during the quarter ended September 30, 2024, there were no unregistered sales of our securities that were not reported in a Current Report on Form 8-K.

On August 23, 2024, two investors entered into conversion agreements (the “Conversion Agreements”) with the Company, pursuant to which the Company agreed to convert the principal amount, plus any accrued but unpaid interest pursuant to two outstanding promissory notes, totalling $20,076 each (the “Debt”), held by the Investors to Common Stock at a conversion price of $1.02 per share.

Also in satisfaction of the Debt and pursuant to the Conversion Agreement, the Company issued to each of the two Investors three warrants (each an “August 23 Warrant”). Each August 23 Warrant becomes exercisable on August 16, 2025, and has term of 10 years. The August 23 Warrants are exercisable for cash only and have no price-based antidilution. The first August 23 Warrant is for 10,707 shares of Common Stock and is exercisable at $1.875 per share. The second August 23 Warrant is for 7,648 shares of Common Stock, exercisable at $2.625 per share. The third August 23 Warrant is for 5,948 shares of Common Stock, exercisable at $3.375 per share.

The August 23 Warrants and the shares issued in satisfaction of the Debt were issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act and Regulation D promulgated under the Securities Act. The Company relied on this exemption from registration based in part on representations made by the investors.

(b) Not applicable.

(c) None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

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Item 6. Exhibits.

Exhibit No. |  | Description
3.1 |  | Certificate of Incorporation of Integrity Applications, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 filed with the SEC on August 22, 2011)
3.2 |  | Certificate of Amendment to Certificate of Incorporation of Integrity Applications, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 filed with the SEC on August 22, 2011)
3.3 |  | Bylaws of Integrity Applications, Inc. (incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1 filed with the SEC on August 22, 2011)
3.4 |  | Certificate of Amendment to Certificate of Incorporation of Integrity Applications, Inc. (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 23, 2020)
3.5 |  | Amendments to The Company’s Certificate of Incorporation (incorporated by reference to Exhibit 3.7 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2022)
3.6 |  | Certificate of Amendment to Amended and Restated Certificate of Incorporation, as filed with the Secretary of State of the State of Delaware on May 17, 2024 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with SEC on May 20, 2024)
3.7 |  | First Amendment to Bylaws (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 20, 2024)
4.1 |  | Form of Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with SEC on July 1, 2024)
4.2 |  | Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with SEC on July 31, 2024)
10.1 |  | Form of Note and Warrant Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with SEC on July 1, 2024)
10.2 |  | Form of Promissory Note (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with SEC on July 1, 2024)
10.3 |  | Form of Promissory Note (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with SEC on July 22, 2024)
10.4 |  | Form of Convertible Promissory Note (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with SEC on July 31, 2024)
31.1* |  | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2* |  | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1** |  | Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.1** |  | Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS |  | Inline XBRL Instance Document
101.SCH |  | Inline XBRL Schema Document
101.CAL |  | Inline XBRL Calculation Linkbase Document
101.LAB |  | Inline XBRL Label Linkbase Document
101.PRE |  | Inline XBRL Presentation Linkbase Document
101.DEF |  | Inline XBRL Definition Linkbase Document
104 |  | Cover Page Interactive Data File (embedded within the Inline XBRL document)

* | Filed herewith.
** | Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: November 14, 2024

| GLUCOTRACK, INC.
| By: | /s/ James Cardwell
| Name: | James Cardwell
| Title | Chief Financial Officer
|  | (Principal Financial Officer)

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