Glucotrack, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. Glucotrack is a medical-device company developing glucose-monitoring products. The company reported no revenue for the quarter and said it had not generated significant revenue from GlucoTrack 1.0 sales.
Financial results and position
| Metric | Q1 2023 | Q1 2022 / comparison |
|---|---|---|
| Research and development expense | $642,000 | $460,000 |
| General and administrative expense | $642,000 | $633,000 |
| Total operating expenses and operating loss | $1.284 million | $1.093 million |
| Net loss | $1.286 million | $1.093 million |
| Loss per share, basic and diluted | $0.08 | $0.07 |
| Net cash used in operating activities | $1.313 million | $1.265 million |
| Cash and cash equivalents at period end | $1.003 million | $2.312 million at Dec. 31, 2022 |
| Total liabilities | $1.240 million | $1.208 million at Dec. 31, 2022 |
| Stockholders’ equity | $11,000 | $1.230 million at Dec. 31, 2022 |
Amounts are in U.S. dollars; financial-statement figures are unaudited. There is no meaningful gross margin disclosure because the filing reports no revenue. Operating expenses increased year over year, primarily because of higher accrued professional fees in R&D; G&A increased only slightly. The company had $193,000 in non-current loans from stockholders. Cash, cash equivalents and restricted cash together were $1.013 million at quarter-end.
Liquidity, financing and listing status
Glucotrack reported an accumulated deficit of $103.187 million and a history of operating losses and negative operating cash flow. Management said the company depends on external financing, but believed available funds would support its plans for the 12 months after the reporting period, including the proceeds of a subsequent public offering.
The offering was agreed on April 13 and closed on April 17, 2023. It raised approximately $10.0 million gross through 5,376,472 common shares and 1,976,470 pre-funded warrants; net proceeds were approximately $8.73 million after $1.27 million of issuance costs. The company said the offering brought pro forma stockholders’ equity above Nasdaq’s $2.5 million minimum. The cover reports 20,892,193 common shares outstanding as of May 12, 2023, compared with 15,503,632 at March 31.
Outlook, developments and risks
- Glucotrack 2.0 is a next-generation non-invasive monitor using ultrasound-only technology. Management expected to begin a first-in-human study in Q2 or Q3 2023, with sensor characterization and algorithm development as primary goals; commercial-version development was expected to begin late in Q4 2023. These are forward-looking plans, not reported results.
- The company is also assessing feasibility of a long-term implantable continuous glucose monitor and intended to complete its feasibility study in Q2 2023. It is developing companion applications and a cloud platform alongside its devices.
- Management expected R&D expense to increase as it hires and develops and validates products, but said spending could be adjusted based on available financing and commercial needs. Product development, clinical testing, regulatory approval, commercialization and future financing remain material uncertainties.
- Nasdaq had previously notified the company of listing-rule deficiencies, including equity and annual-meeting requirements. The 2022 annual meeting was held March 31, 2023; the subsequent offering addressed the equity threshold on a pro forma basis.
- Management concluded disclosure controls and procedures were ineffective as of March 31, 2023 because of material weaknesses in internal control over financial reporting. No material changes to internal control were reported during the quarter.
Key facts for investors to verify
- Whether the offering proceeds, together with remaining cash and the company’s spending rate, support the stated 12-month funding outlook.
- Progress and results of the planned first-in-human study and implantable-monitor feasibility work, including timing and any resulting development or regulatory changes.
- Nasdaq listing compliance status following the offering and annual meeting.
- Remediation of the disclosed material weaknesses and any subsequent updates to disclosure controls.
- Potential dilution from the offering shares, pre-funded warrants and other outstanding equity instruments.