Glucotrack, Inc. (filing issuer: Integrity Applications, Inc.) — Q2 2021 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2021. The filing identifies the registrant as Integrity Applications, Inc.; its business and product are described as GlucoTrack. Financial amounts below are in thousands of U.S. dollars, except per-share data.
Business context and results
The company is developing and commercializing non-invasive glucose-monitoring devices for people with diabetes and prediabetes. It reported no revenue in either the second quarter or first half of 2021 and has not generated significant operating revenue.
| Metric | Q2 2021 | Q2 2020 | Six months 2021 | Six months 2020 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development | $321 | $379 | $630 | $792 |
| Selling and marketing | $0 | $90 | $23 | $181 |
| General and administrative | $552 | $142 | $1,116 | $394 |
| Total operating expenses / operating loss | $873 / $(873) | $611 / $(611) | $1,769 / $(1,769) | $1,367 / $(1,367) |
| Net loss | $(853) | $(574) | $(1,757) | $(1,308) |
| Basic and diluted loss per share | $(0.06) | $(0.04) | $(0.11) | $(0.09) |
Gross margin and operating margin are not meaningful because the company reported no revenue. Q2 finance income, net, was $20 versus $37 in the prior-year quarter; the six-month statements report $12 versus $59.
Financial position and cash flow
At June 30, 2021, cash and cash equivalents were $7,892, down from $9,823 at December 31, 2020; restricted cash was $78. Total assets were $8,607, current liabilities $1,085, and total liabilities $1,321. The company had $197 of long-term loans from stockholders and operating lease liabilities totaling $100; the filing does not report other borrowings.
Six-month operating cash use was $1,902, compared with $1,892 in 2020. Investing activities provided $3, versus $15 used in the prior period; financing cash flow was zero, compared with $13,009 provided in 2020, primarily from the February 2020 stock placement. Cash, cash equivalents, and restricted cash totaled $7,970 at period end. No off-balance-sheet arrangements were reported.
Changes, outlook, and risks
- Compared with Q2 2020, total operating expenses increased $262, principally reflecting higher G&A ($552 versus $142), while R&D declined and selling and marketing activity was absent. The Q2 net loss widened by $279. For the first half, higher G&A more than offset lower R&D and selling and marketing expenses, and the net loss widened by $449.
- Management said cash was expected to fund operations for more than 12 months from the report date, based on its current cash burn, strategy, and operating plan. It expects to need additional capital to fund needs beyond that period, or sooner if plans or cash needs change.
- Management described an accelerated GlucoTrack 2.0 development plan: a wireless, rechargeable earclip paired with a smartphone, intended to improve capabilities and accuracy and reduce manufacturing and user costs. The company said it would prioritize introducing GlucoTrack 2.0 rather than GlucoTrack 1.0 and was working with European partners on a distribution roadmap. No launch date or quantified guidance was provided.
- The company reported progress toward potential reimbursement programs in the Netherlands, while noting reimbursement is important to meaningful sales. It was also planning U.S. market entry, including identifying clinical sites, interviewing CROs, and planning FDA clinical trials and field testing. No FDA approval or U.S. commercialization timetable was stated.
- Key risks include continued losses and reliance on external financing, product-development and clinical-trial execution, regulatory approvals, market acceptance and reimbursement, and COVID-19 effects on demand and operations. The company reported an accumulated deficit of $95,156 and negative operating cash flow since inception.
- Subsequent to quarter end, on August 13, 2021, the company effected a 1-for-13 reverse share split in connection with a planned Nasdaq listing application. Share, option, warrant, and loss-per-share figures in the statements were retrospectively adjusted.
Investor facts to verify
- Confirm the registrant’s identity and corporate-name relationship: this filing is headed Integrity Applications, Inc., while the request identifies Glucotrack, Inc.
- Assess whether the stated cash runway remains valid against actual spending, the GlucoTrack 2.0 development plan, and the timing and availability of additional financing.
- Track GlucoTrack 2.0 development milestones, U.S. FDA trial requirements, European distribution plans, and progress on insurance reimbursement.
- Verify whether product performance claims and prior clinical results translate into regulatory clearance, reimbursement, and commercial sales; the filing reports no revenue for the periods presented.
- Review the impact of the reverse split and any subsequent Nasdaq listing developments.