Glucotrack, Inc. — 2022 Form 10-K
Business context and reporting period. This annual report covers the fiscal year ended December 31, 2022; it does not provide a standalone fourth-quarter financial summary. Glucotrack is a pre-commercial medical-device developer focused on glucose monitoring. Its main product under development, GlucoTrack 2.0, is a non-invasive ear-clip monitor; the company also began feasibility work on an implantable continuous glucose monitor after acquiring related intellectual property in October 2022.
Financial performance and position
Amounts below are in U.S. dollars; financial-statement amounts are in thousands except per-share data. The company reported no revenue in either year, so revenue growth and gross margins are not applicable.
| Metric | 2022 | 2021 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $1,967 | $1,810 |
| Selling and marketing expense | $0 | $139 |
| General and administrative expense | $2,465 | $2,091 |
| Operating loss | $(4,432) | $(4,040) |
| Net loss | $(4,435) | $(4,067) |
| Basic and diluted loss per share | $(0.29) | $(0.26) |
| Net cash used in operating activities | $(3,729) | $(3,769) |
| Cash and cash equivalents at year-end | $2,312 | $6,062 |
At December 31, 2022, total assets were $2,438, current assets $2,379, current liabilities $1,013, total liabilities $1,208, and stockholders’ equity $1,230. The company had $195 of stockholder loans classified as non-current liabilities. These loans bear no interest, are indexed to the Israeli consumer price index, and generally become repayable after a profitable year, subject to a working-capital safeguard. A separate contingent royalty obligation to the Israeli Innovation Authority was approximately $80, excluding interest.
Material changes versus 2021
- Net loss increased by $368, primarily reflecting higher general and administrative and research and development costs.
- Research and development expense rose $157, with professional fees increasing; selling and marketing expense fell from $139 to zero as business-development spending was reduced pending product development.
- General and administrative expense increased $374, mainly due to higher directors’ and officers’ insurance costs associated with the Nasdaq listing.
- Cash and cash equivalents declined by $3,750. Operating cash use was broadly similar year over year, while foreign-exchange effects also reduced cash in 2022.
- Accumulated deficit reached $101,901, compared with $97,466 at the end of 2021.
Outlook, risks and unusual items
- Funding and going concern: Management states that year-end cash is insufficient to fund its plans for the following 12 months. The company depends on external financing, and the auditor’s report highlights substantial doubt about its ability to continue as a going concern. Management plans to seek equity or debt financing; its effective shelf registration permits registration of up to $100 million of securities, but funding is not assured.
- Development plans: The company expected to start a first-in-human GlucoTrack 2.0 study in the second quarter of 2023, with commercial-version development expected to begin late in the third quarter of 2023. It identified sensor-placement challenges requiring further mechanical work. The implantable CGM remained in feasibility assessment; stated goals included bench and animal testing and further prototype development. These are plans, not achieved outcomes.
- Regulatory and commercial uncertainty: Neither GlucoTrack 2.0 nor the implantable CGM had marketing clearance or approval. The FDA had not determined whether a de novo route would be acceptable for GlucoTrack 2.0; the implantable product was expected to face the PMA pathway. Clinical success, reimbursement, manufacturing, and market acceptance remain uncertain. GlucoTrack 1.0’s CE Mark and ISO certifications had been withdrawn.
- Nasdaq listing: Nasdaq notified the company in November 2022 that it failed the continued-listing alternatives under Rule 5550(b)(1). In January 2023 it also notified the company of an annual-meeting compliance issue. The filing says Nasdaq granted an extension through May 22, 2023 to regain compliance with Rule 5550(b).
- Internal controls: Management concluded that internal control over financial reporting and disclosure controls were ineffective at year-end due to material weaknesses involving limited accounting staff, segregation of duties, and insufficient entity-level, transaction-level, and IT controls. Remediation, including hiring, was planned for 2023; completion and effectiveness were not assured. The auditor did not provide an internal-control attestation.
- Related-party and equity items: The company purchased implantable-CGM intellectual property from its CEO for $1 cash plus up to 1,000,000 shares tied to milestones, with a potential true-up to 1.5% of outstanding shares. No milestone consideration was recorded by year-end. The company also recorded $102 of 2022 expenses under an advisory agreement with an entity controlled by a director, including $56 related to extending warrant exercise periods.
- Other risks: The company had three full-time employees and relied on consultants and third parties. It cited risks from financing needs, competition, clinical and regulatory delays, contract manufacturing, intellectual property, reimbursement, and currency movements. No material litigation or off-balance-sheet arrangements were reported.
Most important facts for investors to verify
- Current cash, financing raised since year-end, cash burn, and whether management can fund operations through planned trials.
- Progress and actual results of GlucoTrack 2.0’s human study, sensor-placement improvements, FDA pathway discussions, and implantable-CGM feasibility work.
- Nasdaq compliance status and the outcome of the May 22, 2023 deadline and annual-meeting deficiency.
- Remediation of the disclosed material weaknesses and any subsequent changes to financial reporting controls.
- Terms, milestone status, dilution implications, and governance review of the CEO IP agreement and other related-party arrangements.