Glucotrack, Inc. — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022. Financial statement amounts are in thousands of U.S. dollars, except per-share data. The company is a medical-device developer focused on non-invasive glucose monitoring; it reported no revenue line in the statements of operations.
Financial results and position
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Research and development expense | $469 | $321 | $929 | $630 |
| Selling and marketing expense | $0 | $0 | $0 | $23 |
| General and administrative expense | $654 | $552 | $1,287 | $1,116 |
| Total operating expenses / operating loss | $1,123 / $(1,123) | $873 / $(873) | $2,216 / $(2,216) | $1,769 / $(1,769) |
| Net loss | $(1,127) | $(853) | $(2,220) | $(1,757) |
| Basic and diluted loss per share | $(0.07) | $(0.06) | $(0.14) | $(0.11) |
- Cash and liquidity: Cash and cash equivalents were $3,854 at June 30, 2022, down from $6,062 at December 31, 2021. Restricted cash was $44; cash, cash equivalents and restricted cash totaled $3,898.
- Cash flow: Six-month operating cash use was $2,181, compared with $1,902 in the prior-year period. Investing cash use was $4; cash, cash equivalents and restricted cash declined by $2,215.
- Balance sheet: Total assets were $4,317 and total liabilities were $1,127. Current liabilities were $935. Stockholder loans were $192, compared with $210 at year-end; the filing reports no other non-current debt. Stockholders’ equity was $3,190.
- Margins: Not meaningful given the absence of reported revenue.
Material changes and business developments
- Q2 net loss increased by $274 year over year; six-month net loss increased by $463. Management attributed the increases primarily to higher operating expenses.
- R&D expense rose as the company developed and validated GlucoTrack 2.0. G&A increased with hiring and expanded personnel. Selling and marketing was discontinued pending completion of GlucoTrack 2.0 development.
- The company said it completed lab testing of its GlucoTrack 2.0 clinical prototype in early Q2, including simulated-use testing, and reported better-than-expected in-house accuracy and performance. These were preliminary results, not clinical findings.
- Management planned to begin a first-in-human study in Israel in Q3 2022 and U.S. center studies in Q4 2022, subject to study progress and approvals. The U.S. study was intended to precede a potential pivotal trial for FDA clearance.
Outlook, risks and controls
- Going concern: The company has not generated significant operating revenue, has an accumulated deficit of $99,686 and reported continuing losses and negative operating cash flow. Management stated these conditions raise substantial doubt about its ability to continue as a going concern. It expects substantial further spending and depends on external financing; there is no assurance financing will be obtained. A $100 million shelf registration permits certain equity and/or debt offerings, but does not assure proceeds.
- Spending outlook: Management expects R&D expenses to increase in 2022 and beyond for hiring and product development, while noting spending may be adjusted to available resources and business needs. No specific financial guidance was provided.
- Product and regulatory risk: GlucoTrack 2.0 remains under development; clinical performance, regulatory clearance, commercial acceptance and planned study timing are uncertain. The company’s expectations about accuracy and potential commercial benefits are forward-looking.
- Internal controls: Management concluded disclosure controls and procedures were ineffective as of June 30, 2022 due to material weaknesses in internal control over financial reporting. No material control changes during the quarter were reported.
- The company reported no off-balance-sheet arrangements and no reportable subsequent events. It stated that the interim results are not necessarily indicative of full-year or future results.
Key facts for investors to verify
- Available cash, operating cash burn and the timing, amount and terms of any future financing.
- Progress and results of the planned Israel and U.S. clinical studies, including whether timelines or regulatory plans change.
- Whether GlucoTrack 2.0 demonstrates reliable clinical accuracy and achieves the anticipated design and manufacturing benefits.
- Remediation of the disclosed material weaknesses and any changes in reporting controls.
- Potential dilution: 15,473,262 common shares were outstanding at June 30, 2022; 6,512,638 weighted-average options and warrants were excluded from diluted loss per share as anti-dilutive.