GCTK US Equity☆

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

10-K

(Mark

One)

For

the fiscal year ended December 31, 2021

For

the transition period from _________________________ to _________________________

Commission

file number 000-54785

GLUCOTRACK,

INC.

(FORMERLY:

INTEGRITY APPLICATIONS, INC.)

(Exact

name of registrant as specified in its charter)

(Address of principal executive offices) (Zip Code)

Registrant’s

telephone number, including area code 972 (8) 675-7878

Securities

registered pursuant to Section 12(b) of the Act: None

Securities

registered pursuant to Section 12(g) of the Act: Common stock, par value $0.001 per share

Indicate

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes

☐ No☒

Indicate

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes

☐No☒

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 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,

to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this

Form 10-K or any amendment to this Form 10-K ☒.

Indicate

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting

company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company”

in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☒ Smaller Reporting Company ☒

Emerging growth Company ☐

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

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 Nasdaq Capital Market

The

aggregate market value of the voting stock held by non-affiliates is approximately $32,694,000based on the closing price of $5.33

per share of the registrant’s common stock, as reported on the OTCQB on June 30, 2021, the last business day of the registrant’s

most recently completed second fiscal quarter of 2021.

As

of March 30, 2022, 15,455,109 shares of the registrant’s common stock, par value $0.001 per share, were outstanding.

DOCUMENTS

INCORPORATED BY REFERENCE:

None,

except as noted for Part III information in the Company’s Schedule 14A to be filed on or before April 30, 2022.

TABLE

OF CONTENTS

GENERAL 3

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS 3

PART I 4

Item 1. Business. 4

Item 1A. Risk Factors. 22

Item 1B. Unresolved Staff Comments. 37

Item 2. Properties. 37

Item 3. Legal Proceedings. 37

Item 4. Mine Safety Disclosures 37

Item 6. Selected Financial Data 38

Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 41

Item 8. Financial Statements and Supplementary Data. 41

Item 9A. Controls and Procedures. 42

Item 9B. Other Information. 42

PART III 42

Item 10. Directors, Executive Officers and Corporate Governance. 42

Item 11. Executive Compensation. 43

Item 14. Principal Accounting Fees and Services. 43

Item 15. Exhibits, Financial Statement Schedules. 43

SIGNATURES 46

GENERAL

Unless

the context otherwise requires, the terms “we”, “our”, “ours” “us”, “GlucoTrack”

and “Integrity”, refer to A.D. Integrity Applications, Ltd., an Israeli corporation (“Integrity Israel”), for

all periods prior to July 15, 2010 and to Integrity Israel and GlucoTrack, Inc. (Formerly: Integrity Applications, Inc.),

a Delaware corporation, on a combined basis, for all periods from and including July 15, 2010 to March 31, 2022, and thereafter

to Integrity Israel and GlucoTrack, Inc.

CAUTIONARY

NOTE REGARDING FORWARD LOOKING STATEMENTS

This

Annual Report on Form 10-K 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 Annual Report on Form 10-K, 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. Risks

that could affect our business include the duration and scope of the COVID-19 pandemic and the impact on the demand for our products;

actions by governments, businesses and individuals taken in response to the pandemic; the length of time of the COVID-19 pandemic and

the possibility of its reoccurrence; the timing required to develop effective treatments and a vaccine in the event of future outbreaks;

the eventual impact of the pandemic and actions taken in response to the pandemic on global and regional economies; and the pace of recovery

when the COVID-19 pandemic subsides. 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 Annual Report on Form 10-K 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 Annual Report

on Form 10-K 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 this Annual Report on Form 10-K under the caption “Risk Factors,” beginning on page 30. 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.

PART

I

Item

1. Business.

Overview

Incorporated

in Delaware in May 2010, we are a medical device company focused on the design, development and commercialization of non-invasive glucose

monitoring devices for use by people with diabetes and pre-diabetics. On July 15, 2010, we completed a reverse triangular merger with

Integrity Israel and Integrity Acquisition Corp. Ltd., an Israeli corporation and a wholly owned subsidiary of ours, pursuant to which

Integrity Acquisition Corp. Ltd. merged with and into Integrity Israel and all of the stockholders and option holders of Integrity Israel

became entitled to receive shares and options in us in exchange for their shares and options in Integrity Israel (the “Reorganization”).

Following the Reorganization, the former equity holders of Integrity Israel were entitled to the same proportional ownership in us as

they had in Integrity Israel prior to the Reorganization. As a result of the Reorganization, Integrity Israel became a wholly owned subsidiary

of ours. We operate primarily through Integrity Israel.

Integrity

Israel was founded in 2001 with a mission to develop, produce and market non-invasive glucose monitors for home use by diabetics. We

have developed a non-invasive glucose monitor, the GlucoTrack® glucose monitoring device, which is 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 (“GlucoTrack 1.0”) utilizes a combination of

ultrasound, electromagnetic and thermal technologies to obtain glucose measurements in less than one minute via a small sensor that

is clipped onto one’s earlobe and connected to a small, handheld control and display unit, all without drawing blood or

interstitial fluid.

We

are currently developing our own companion applications and a cloud-based solution, as well as conducting ongoing discussions with potential

partners, to offer an effective platform to provide real time, data driven personalized tools to effectively help a user manage their

diabetes. In addition to being a critical and effective management tool for the end user, we believe that third parties such as insurers,

pharmaceutical companies and advertisers would be willing to pay for the de-identified data that we will obtain through our platform,

and that this is an opportunity for us to develop an additional revenue source.

After

a home-based short calibration process of approximately thirty minutes consisting of three typical blood glucose reference measurements,

GlucoTrack 1.0 can be used to non-invasively measure glucose levels for six months before a user is required to repeat the calibration

process. The entire calibration process can be performed by the user themselves without the need for a trained calibrator. We believe

the simple-to-perform calibration, as well as the infrequency of the required re-calibration are significant advantages over our competition.

GlucoTrack

1.0 received the initial Conformité Européene (CE) Mark (indicating the conformity of the Company’s product with

health, safety, and environmental protection standards for products sold within the European Economic Area) approval for the GlucoTrack

1.0 from DEKRA Certification B.V., our European notified body (the “Notified Body”), which is an entity that has been accredited

by a member state of the European Union (“EU”) to assess whether a product to be placed on the market meets certain preordained

standards. The intended use for GlucoTrack 1.0 received by the Notified Body is for both those subjects with Type 2 diabetes as well

as those suffering from pre-diabetes.

Receipt

of the CE Mark allows us to market and sell GlucoTrack 1.0 glucose monitoring device in EU member countries that have adopted the European

Medical Device Directive (the “MDD”) without being subject to additional national regulations with regard to demonstration

of performance and safety. However, although the MDD is applicable throughout the EU, in practice it does not ensure uniform regulation

throughout the EU. Accordingly, member countries may apply and enforce the MDD’s terms differently, and certain EU member countries

may request or require performance and/or safety data in addition to the MDD’s requirements from time to time, on a case-by-case

basis. The CE Mark also permits the sale in countries that have an MDD Mutual Recognition Agreement with the EU. This would include some

countries in South East Asia as well as in Latin America, opening new potential markets for Integrity on a global basis.

Safety

and quality are non-negotiables in the medical devices industry. Regulatory requirements are increasingly stringent throughout every

step of a product’s life cycle, including service and delivery. More and more, organizations in the industry are expected to demonstrate

their quality management processes and ensure best practice in everything they do. ISO 13485 is an internationally agreed standard that

sets out the requirements for a quality management system specific to the medical devices industry. On March 1, 2019, we received an

extension of our ISO 13485:2016 certificate and Annex II certification from the EU. The ISO 13485:2016 certification signifies that we

have met the standards required for company-wide implementation of device quality management system(s). The scope of the certification

is design, development, manufacture and service of non-invasive glucose monitoring systems for home use. Annex II also addresses quality

control systems. The certification allows us to self-certify certain modifications and changes and simplifies some of the reporting to

and review by the relevant Notified Body. This can shorten the CE-mark review process of future GlucoTrack enhancements or revisions,

including software updates and other improvements of the device that do not affect the intended use and/or safety performance. The ISO

13485:2016 and Annex II certifications enable us to potentially reduce the time to market for product sales on new, enhanced or modified

GlucoTrack devices.

Clinical

trials conducted in Germany by Pfutzner Science & Health Institute, GmbH, headed by Prof. Dr. Andreas Pfutzner, on subjects with

Type 2 diabetes and pre-diabetes, as well as at Soroka University Medical Center, Beer-Sheva, Israel, demonstrated favorable results.

Results from the trials show 99.3% of the study data points were within the clinically accepted A and B zones of the Clarke Error Grid

(which is a tool used to quantify the clinical accuracy of blood glucose estimates generated by meters as compared to a reference value),

and 17.0% Mean Absolute Relative Difference. In addition, the German trial concluded that the data confirms the performance of the GlucoTrack

among its intended users, including pre-diabetic patients.

In

addition, the Company has demonstrated (1) GlucoTrack 1.0 demonstrates consistent glucose measurement repeatability between different

GlucoTrack devices and on each earlobe of the same subject; (2) the repeatability of different GlucoTrack 1.0 devices is similar at all

tested glucose ranges and post-prandial time periods; and (3) the GlucoTrack 1.0 mean precision absolute relative difference (PARD) of

8.2% is equivalent or better than the independently reported PARD values of commercially available continuous glucose monitoring systems.

The

Company conducted an additional study that evaluated GlucoTrack accuracy in 172 adults with type 2 diabetes who were prescribed one or

more medications for major medical conditions associated with diabetes and presented key findings of this study at the European Association

for the Study of Diabetes Congress (EASD) in Lisbon, Portugal. The experiment stratified participants into five medication groups, focusing

on anti-cholesterolemia, anti-hypertension, anti-thrombotic, and anti-diabetic (prolonged duration and short and mixed duration) medications.

The study demonstrated that the use of these common concomitant medications in diabetes had no effect on the performance of GlucoTrack

1.0.

The

Company had begun the implementation of a proof-of-concept pilot program for GlucoTrack 1.0 in the Netherlands, a country chosen based

on the relatively smaller size of the marketplace to allow us to rapidly assess our performance and make adjustments as necessary. We

have been working closely with our exclusive distributor in the Netherlands, Medireva B.V., and have accomplished product and disease

area training across the organization and segmentation of the local target audiences including key opinion leaders, treating physicians,

and diabetes nurses. The most important aspect of our pilot program in the Netherlands are the discussions held with many health insurance

companies. Approval of full or partial reimbursement by the health insurance companies will be a key factor in enabling us to achieve

significant sales volume. The Company has made progress with several of these companies on initial programs with GlucoTrack 1.0 as an

important step towards reimbursement approval.

Talent

development, recruiting and organizational health have been a critical focus of the Company. A number of high-quality individuals have

joined the Company, each of whom bring extensive experience in their respective fields. We have bolstered our Senior Management with

the recruitment of Erez Ben-Zvi, a highly experienced MedTech development professional who joined us last year as Vice President of Product,

and later on took on the additional role of General Manager. Paul, V. Goode PhD, who has a decorated career developing innovative medical

technologies, including at DexCom and MiniMed and was a member of the Board of Directors of the Company, was appointed as President and

Chief Operating Officer. In addition, James P. Thrower PhD, a seasoned executive formerly of Sterling Medical Devices, Mindray DS

USA and DexCom, Inc. joined as Vice President of Engineering. Luis J. Malavé, formerly of Insulet Corp, Medtronic and MiniMed

has joined as an independent board member. Several highly talented and accomplished executives joined the Company as senior advisors

to the Board. These include Yair Briman, the former CEO of Philips Healthcare Informatics, Daniel McCaffrey MBA MA, a world-renowned

behavioral scientist and digital health expert formerly at Samsung Health and Dexcom, Inc., Dr. Alexander Raykhman PhD,

a measurement and artificial intelligence expert 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.

Recently,

the Company performed a top-down analysis of the GlucoTrack 1.0 model to identify areas of potential enhancement, as it relates to the

platform, integrations, sensor technologies, accuracy as well as manufacturing costs. The result of this comprehensive review is an accelerated

development plan for GlucoTrack 2.0. GlucoTrack 2.0 will be a completely wireless and rechargeable earclip to be paired with a smartphone,

with more capabilities and features, increased accuracy, significantly greater margins for the Company and lower cost to the end-user

as compared to GlucoTrack 1.0.

As

previously reported, the Company made significant progress towards receiving insurance reimbursement in the Netherlands. With the

new accelerated development plan for GlucoTrack 2.0, and all of the expected advantages over GlucoTrack 1.0, it became clear to the Company

that introducing GlucoTrack 2.0 rather than the GlucoTrack 1.0 would serve the diabetes market and the Company more effectively. We are

currently working with our European partners on the roadmap for distribution of GlucoTrack 2.0 when completed and ready to market.

In

addition to the European markets, the Company is now focused on the U.S. market as well, including building out its U.S. go-to-market

strategy and planning the required FDA clinical trials and field testing to support its entrance into the market. The Company is currently

in the process of identifying clinical sites in the U.S., interviewing Contract Research Organizations (CRO’s), and forming its

Scientific and Medical Advisory Boards. We intend to build out a team to support the U.S. activities while continuing our technology

development in our R&D facility located in Israel.

Recent

Events

On

June 22, 2021, Luis J. Malavé has been appointed to the Company’s Board of Directors. Mr. Malavé brings more than

30 years of leadership experience in the MedTech industry, primarily in diabetes management, spanning all company stages, from private

startups to large-cap publicly listed companies. He has extensive expertise in product development, operations, marketing, strategic

partnerships, and US FDA regulatory strategy.

Since

October 2017, Mr. Malavé has served as President of EOFLOW CO. Ltd., a company listed on the Korea Stock Exchange that has developed

a wearable disposable insulin pump. From October 2014 to June 2016, he was COO of Mikroscan Technologies. Prior to that, Mr. Malavé

was the President and CEO of Palyon Medical, maker of an implantable drug-delivery system that spun out from German medical-technology

giant Fresenius SE. Prior to Palyon, he spent nearly a decade at insulin pump maker Insulet Corp., including as its Senior Vice President

of Research, Development and Engineering, and as Chief Operating Officer. He also held various senior positions at Medtronic and MiniMed,

overseeing product development of various diabetes management devices. Mr. Malavé earned his Bachelor’s degree in Mathematics

and Computer Science from the University of Minnesota, a Master’s degree in Software Engineering from the University of St. Thomas,

and an MBA from the University of Maryland.

On

October 19, 2021, Paul V. Goode was appointed as President and Chief Operating Officer of the Company, effective November 1, 2021 (“Effective

Date”). He has served as a member of Integrity’s Board of Directors since December 17, 2020. Concurrent with his new appointment,

Mr. Goode will be stepping down from the Board. In this role, Goode will lead the company’s operations, overseeing strategy, design,

manufacturing, business and product development and begin to build the U.S. infrastructure in preparation for the U.S. clinical trials

of GlucoTrack. He will devote such time as necessary to perform his duties but shall be able to pursue other professional opportunities

at the same time. His base salary shall be $175,000 per year, and he shall be entitled to a cash bonus of up to 20% of his annual base

salary as determined by the Company’s Compensation Committee and shall be granted options to purchase up to One and half Percent

(1.5%) of the fully diluted common stock, par value $0.001 per share, of the Company (“Common Stock”) as of the Effective

Date, with a per share exercise price equal to the greater of (A) $5.20 per share or (B) the closing price of a share of Common Stock

on the Effective Date, as reported by Bloomberg L.P., which shall vest in equal monthly installments over a three year period following

the Effective Date. The bonus and equity incentives shall be subject to clawback rights if there is a misstatement of financials which

changes any metrics upon which a bonus or incentives are based and the clawback will be pro rata based upon the changes in the financials

with respect to the effect on any underlying metrics.

In

connection with our application to list our shares of common stock

on Nasdaq Capital Market (“NASDAQ”), on August 13, 2021, we effected a reverse split of our common stock in a ratio of

1 for 13 (the “Reverse Share Split”).

On

September 27, 2021, our shelf registration statement on Form S-3 (file no. 333-259664) was declared effective by the SEC. The shelf registration

statement permits us to register up to $100,000,000 of certain equity and debt securities of the Company via prospectus supplement.

On

December 8, 2021, we announced that our shares of common stock were approved for listing on the NASDAQ. Trading on NASDAQ commenced

on December 10, 2021 under its existing trading symbol, IGAP.

On

March 14, 2022, we changed our name to GlucoTrack, Inc. with Nasdaq and our trading symbol to GCTK.

On

March 22, 2022, Shalom Shushan, Chief Technology Officer, provided notice of his resignation from the Company, effective May 22, 2022,

for personal reasons. In connection with the Company’s previously announced plans to migrate certain aspects of product development

to the United States, James P. Thrower PhD, Vice President of Engineering, will be assuming Mr. Shushan’s responsibilities.

We

may be at risk as a result of the current COVID-19 pandemic. Risks that could affect our business include the duration and scope of the

COVID-19 pandemic and the impact on the demand for our products; actions by governments, businesses and individuals taken in response

to the pandemic; the length of time of the COVID-19 pandemic and the possibility of its reoccurrence; the timing required to develop

effective treatments and a vaccine in the event of future outbreaks; the eventual impact of the pandemic and actions taken in response

to the pandemic on global and regional economies; and the pace of recovery when the COVID-19 pandemic subsides.

Since

its inception date, the Company did not conduct any material operations other than those carried out by Integrity Israel. The development

and commercialization of the Product is expected to require substantial expenditures. The Group has not yet generated significant revenues

from operations, and therefore they are dependent upon external sources for financing their operations. As of December 31, 2021, the

Group has incurred accumulated deficit of $97,466 thousand. During the year ended December 31, 2021 the Company incurred losses from

ongoing operation and has negative cash flow from operating activity.

On

February 14, 2020, the Company closed on a $15 million private placement of its common stock, for which it received net cash in

excess of $13,009 thousand. In addition, on September 27, 2021, the Company’s shelf registration statement on Form S-3

was declared effective by the Securities and Exchange Commission (SEC) which permits the Company to register up to $100,000 thousand

of certain equity and debt securities of the Company via prospectus supplement. To date, funds have not been raised through this

shelf registration statement

Management

believes the cash balance amounted to $6,062 thousand as of December 31, 2021, is sufficient to meet its capital needs of the Group for

at least 12 months from the issuance date of these consolidated financial statements. Thus, it is expected that the Company will be able

to operate as a going concern for at least 12 months from the date hereof.

Market

Opportunity

Diabetes

Diabetes

is a chronic, life-threatening disease for which there is no known cure. Diabetes is caused by the body’s inability to produce

or effectively utilize the hormone insulin. This inability prevents the body from adequately regulating blood glucose levels. Glucose,

the primary source of energy for cells, must be maintained at certain concentrations in the blood in order to permit optimal cell function

and health. Normally, the pancreas provides control of blood glucose levels by secreting the hormone insulin to decrease blood glucose

levels when concentrations are too high. In people with diabetes, blood glucose levels fluctuate between very high levels, a condition

known as hyperglycemia, and very low levels, a condition known as hypoglycemia. Hyperglycemia can lead to serious long-term complications,

such as blindness, kidney disease, nervous system disease, amputations, stroke and cardiovascular disease. Hypoglycemia can lead to confusion,

loss of consciousness or death.

Diabetes

is typically classified into two major groups: Type 1 and Type 2. Type 1 diabetes is characterized by the body’s inability to produce

insulin, resulting from destruction of the insulin producing cells of the pancreas. Individuals with Type 1 diabetes must rely on frequent

insulin injections in order to regulate and maintain blood glucose levels. Type 1 diabetes is frequently diagnosed during childhood or

adolescence, although disease onset can occur at any age. Type 2 diabetes, the more common form of diabetes, is characterized by the

body’s inability to either properly utilize insulin or produce enough insulin. Type 2 diabetes is associated with older age, obesity,

family history of diabetes, history of gestational diabetes, impaired glucose metabolism, physical inactivity and race or ethnicity.

Depending on the severity of Type 2 diabetes, individuals may require diet and nutrition management, exercise, oral medications or insulin

injections to regulate blood glucose levels.

According

to the Diabetes Atlas (Ninth Edition) published by the International Diabetes Federation in 2019, approximately 463 million adults worldwide,

between the ages of 20 and 79, or over 9% of the world’s adult population, were estimated to suffer from diabetes in 2019 (not

including those persons who suffer from impaired glucose tolerance or gestational diabetes, diabetic conditions first arising during

pregnancy). The International Diabetes Federation estimates that this number will grow to approximately 700 million adults worldwide

by 2045.

Glucose

Monitoring

Blood

glucose levels can be affected by many factors, including the carbohydrate and fat content of meals, exercise, stress, illness or impending

illness, hormonal releases, variability in insulin absorption and changes in the effects of insulin in the body. Given the many factors

that affect blood glucose levels, maintaining glucose within a normal range can be difficult. Diabetics generally manage their blood

glucose levels by administering insulin or ingesting carbohydrates throughout the day to maintain blood glucose within normal ranges.

Normal ranges in diabetics vary from person to person. In order to maintain blood glucose levels within normal ranges, diabetics must

first measure their blood glucose levels so that they can make the proper therapeutic adjustments. As adjustments are made, additional

blood glucose measurements may be necessary to gauge the individual’s response to the adjustments. More frequent testing of blood

glucose levels provides patients with information that can be used to better understand and manage their diabetes. Testing of blood glucose

levels is usually done before meals, after meals and before going to sleep. Diabetics who take insulin usually need to test more often

than those who do not take insulin.

Clinical

data supports the recommendation that frequent monitoring of blood glucose levels is an important component of effective diabetes management.

The Diabetes Control and Complications Trial1, consisting of patients with Type 2 diabetes, and the 1993 UK Prospective Diabetes

Study2, consisting of patients with Type 2 diabetes, demonstrated that patients who intensely managed blood glucose levels

delayed the onset and slowed the progression of diabetes-related complications. In the Diabetes Control and Complications Trial, a major

component of intensive management was monitoring blood glucose levels at least four times per day using conventional spot finger stick

blood glucose meters. The Diabetes Control and Complications Trial demonstrated that intensive management reduced the risk of complications

by 76% for eye disease, 60% for nerve disease and 50% for kidney disease. Furthermore, a recent meta-analysis of over 25 prospective

studies concluded that chronic hyperglycemia in type 2 diabetes is associated with increased risks of all-cause mortality and cardiovascular

outcomes independently from other conventional risk factors.3 However, despite the evidence that intensive glucose management

reduces the long-term complications associated with diabetes, Karter et al. reported in the 2000 issue of Diabetes Care that 67% of people

with type 2 diabetes fail to routinely monitor their glucose levels.4

Spot

finger stick devices are the most prevalent devices for blood glucose monitoring. These devices require users to insert a strip into

a glucose meter, take a blood sample with a finger stick and place a drop of blood on a test strip that yields a single point in time

blood glucose measurement. Despite continued developments in the field of blood glucose monitors, the routine measurement of glucose

levels remains invasive, painful, inconvenient, difficult and costly. This has resulted in a sub-optimal and irregular measurement regimen

for many diabetics.

1

Group, U. P. D. S. (UKPDS); others Intensive blood-glucose control with sulphonylureas or insulin compared with conventional treatment

and risk of complications in patients with type 2 diabetes (UKPDS 33). The Lancet1998, 352, 837–853.

2

Diabetes Control and Complications Research Group; others The effect of intensive treatment of diabetes on the development and

progression of long-term complications in insulin-dependent diabetes mellitus. N Engl J Med1993, 329, 977–986.

3

hang, Y.; Hu, G.; Yuan, Z.; Chen, L. Glycosylated Hemoglobin in Relationship to Cardiovascular Outcomes and Death in Patients with

Type 2 Diabetes: A Systematic Review and Meta-Analysis. PLOS ONE2012, 7, e42551, doi:10.1371/journal.pone.0042551.

4

Karter, A. J.; Ferrara, A.; Darbinian, J. A.; Ackerson, L. M.; Selby, J. V. Self-monitoring of blood glucose: language and financial

barriers in a managed care population with diabetes. Diabetes Care2000, 23, 477–483.

The

FDA has approved continuous glucose monitoring system (“CGMS”) devices for blood glucose monitoring, when prescribed by a

doctor. CGMS devices use sensors inserted under the skin to check glucose levels in interstitial fluid. The sensor stays in place for

up to fourteen days and then must be replaced. A transmitter sends information about glucose levels via radio waves from the sensor to

a pager-like wireless monitor. According to the National Institute of Diabetes and Digestive and Kidney Diseases at the National Institutes

of Health, CGMS device users must check blood samples with a conventional glucose meter to calibrate the CGMS devices, and because currently

approved CGMS devices are not as accurate as standard blood glucose meters, users should confirm glucose levels with a conventional glucose

meter when making treatment decisions.

The FDA has previously approved a single non-invasive product for glucose trend analysis, the

GlucoWatch®, so long as the device was used with conventional finger stick glucose monitoring devices. However, the device is no

longer available commercially. We are not aware of any other devices that have been approved for use in either the United Stated or the

EU for spot or continuous non-invasive blood glucose measurement.

We

believe that a significant market opportunity exists for a reliable, inexpensive, non-invasive blood glucose measurement device and that

such a device could greatly increase compliance with blood glucose measurement recommendations and help many diabetics better manage

their disease, providing significant benefits to both patients and payors.

The

Product

Our

first generation non-invasive blood glucose monitor, the GlucoTrack 1.0, utilizes a patented combination of ultrasound, electromagnetic

and thermal technologies to obtain blood glucose measurements in less than one minute via a small sensor that is clipped onto one’s

earlobe and connected to a handheld control and display unit. GlucoTrack 2.0, currently under development, utilizes substantially identical

underlying sensor technology, and is expected to be a completely wireless sensor to be clipped on the earlobe. GlucoTrack eliminates

the handheld unit and will transmit results directly to a user’s smartphone.

We

believe that GlucoTrack addresses the unmet need for more frequent monitoring of blood glucose among people with diabetes by overcoming

two of the most significant challenges facing the market:

● pain, as GlucoTrack is a truly non-invasive device; and

We

believe that the overall costs associated with owning and using a GlucoTrack® device are expected to be substantially lower than

the cost of purchasing and using single use invasive devices over an extended period of time. We intend to seek reimbursement approval

for GlucoTrack® from third-party payors, including government payors (such as the Medicare and Medicaid programs in the United States,

in the event GlucoTrack® is approved for commercial sale in the United States), managed care organizations and other third-party

payors. There can be no assurance that such third party-payors will provide reimbursement coverage for GlucoTrack® or, if so, whether

such reimbursement coverage will be adequate. See “Risk Factors - If GlucoTrack® or our future product candidates, if any,

fail to achieve market acceptance or reimbursement coverage from managed care organizations or third-party payors, we may not be able

to generate significant revenue or achieve or sustain profitability”.

Instead

of directly measuring the glucose level of a user’s blood, as conventional spot finger stick devices do, GlucoTrack® uses a

small, non-invasive sensor that is clipped onto a user’s earlobe to obtain certain body measurements using three technologies.

Within one minute, GlucoTrack® will produce a blood glucose measurement.

Since

the GlucoTrack® non-invasive measurement does not directly measure glucose levels in the blood, but rather measures a series of physiological

characteristics that correlate with glucose levels, each patient must be calibrated by using a reference to a measurement obtained from

an invasive device. Calibration consists of comparing an individual patient’s physiological measurements obtained using GlucoTrack®

to measurements obtained from an invasive device under different circumstances over a defined 30-minute period (three measurements that

require approximately 10 minutes each).

The

three different technologies used by GlucoTrack®, ultrasound, electromagnetic and thermal, simultaneously measure three independent

criteria. These three measurements (criteria) are combined together by a unique (online) algorithm to produce an acceptable measurement

of a user’s blood glucose level.

The

technologies operate as follows:

Non-invasive

devices generally require frequent recalibration. The main reasons for calibration are that tissue parameters generally fluctuate in

the area of the measurement and are sensitive to the location of the sensor and the impact of potential disturbances. Disturbances are

less frequent in the earlobes, where GlucoTrack® takes its measurements. Utilizing three channels simultaneously reduces the noise

contribution in the measurement. In addition, the personal ear-clip contains sensors to help users attach the device to the proper part

of the ear lobe. The Notified Body for our CE Mark approval has determined that the initial calibration of the GlucoTrack 1.0 device

is valid for a period of six months which we believe is a significant competitive advantage, while to our knowledge, competing products

require recalibration significantly much more frequently. Therefore, we expect GlucoTrack® will require only an initial calibration

upon use of a new personal ear-clip (to be replaced every six months) and will not require further recalibration.

GlucoTrack®

does not use any optical method (either Infra-Red (IR) or Near Infra-Red (NIR) technology), which we understand are being used by other

developers of non-invasive blood glucose measurement devices. We believe that optical technologies are less reliable than the GlucoTrack’s

combination of ultrasound, electromagnetic and thermal technologies due to inherent physiological limitations with optical technology.

More specifically, optical technology is based on dispersion of a beam that is analyzed by spectrometric methods. As such devices are

non-invasive, the beam passes through other components in the fingertip, such as skin, bone, muscle and fat tissue, which interfere with

the measurements. Generally, most of these interferences have been overcome, but not the epidermis, primarily due to roughness, pigmentation

and perspiration, which act like lenses in optical wavelengths.

Unlike

conventional spot finger stick devices, which require single-use glucose test strips, GlucoTrack® requires no short- term disposables.

We believe that the GlucoTrack’s personal ear-clip will need to be replaced only once every six months, although regulatory authorities

may require that replacement occur more frequently. Since there is no additional cost or pain involved with each blood glucose measurement

using GlucoTrack®, we believe that users of our device would be encouraged to take multiple blood glucose measurements per day, significantly

increasing compliance with blood glucose measurement recommendations and helping diabetics better manage their disease. More frequent

testing of blood glucose levels may provide a patient with information that can be used to determine optimal timing and dosage for corrective

treatments such as insulin, and can also direct a patient to seek a clinical analysis or detailed testing and diagnosis.

We

do not have commercial manufacturing facilities and do not intend to build commercial manufacturing facilities of our own in the foreseeable

future. Our suppliers and their manufacturing facilities must comply with applicable regulations in the jurisdictions in which GlucoTrack®

is to be marketed (including ISO 13485 in the EU), current quality system regulations, which include current good manufacturing practices,

and to the extent laboratory analysis is involved, current good laboratory practices. There can be no assurance that we will be able

to enter into agreements with qualified manufacturers on terms acceptable to us, or at all, or that, once contracted, such manufacturers

will perform as expected.

Furthermore,

the manufacturing of GlucoTrack® may be impacted by the Recast Directive on the Restriction of Hazardous Substances in Electrical

and Electronic Equipment, 2011/65/EU (“RoHS 2”). RoHS 2 is a new EU directive that came into force on July 22, 2014. Like

the MDD, RoHS 2, a recast of Directive 2002/95/EC that will cover electrical and electronic medical devices, is relevant in order to

obtain CE Marking for certain products. RoHS 2 compliance requires medical device manufacturers to: draw up required technical documentation;

conduct an internal control procedure in accordance with Module A of Annex II to Decision No. 768/2008/EC; prepare a Declaration of Conformity;

and affix CE Marking to a finished product. Although these requirements are similar to those of the MDD, RoHS 2 does not require a Notified

Body assessment of compliance. However, if they are not compliant with RoHS 2, medical device manufacturers face the risk of being barred

from selling medical devices in the EU after July 22, 2014.

Sales

& Marketing

We

have a limited number of dedicated sales and marketing personnel, as we intend to collaborate with third parties with established sales

and marketing operations in the medical device industry (such as the distributors described below) to market and sell GlucoTrack®

to point of sale end users and/or local distributors. However, there can be no assurance that we will be able to enter into additional

distribution agreements on terms acceptable to us or at all or that, once contracted, our distributors will perform as expected.

We

are currently in the process of developing our wireless 2.0 model and upon readiness, we intend to conduct clinical trials in the U.S.

for eventual domestic commercialization.

Research

& Development

We

focus significant time and resources on research and development in connection with our efforts to continue to develop, improve and commercialize

GlucoTrack®, as well as in connection with our development of other GlucoTrack® models. Our continuing research and development

activities are primarily focused on software and algorithm improvements intended to improve the accuracy of the device, clinical trials

to test the performance of the GlucoTrack® device when used by children and teenagers between the ages of six and 18, preparation

for future FDA trials, testing new characteristics of the device, development of a new device in the GlucoTrack® family and seeking

to streamline and continue to simplify the calibration process. See “Item 7 – Management’s Discussion and Analysis

of Financial Condition and Results of Operation – Results of Operation” below for a discussion of the research and development

expenses for the fiscal years ended 2021 and 2020.

Our

strategic priorities include the research and development of product enhancements that will improve the ease and usability of GlucoTrack

for patients with a future generation of products. We are focusing our research and development activities around 2 main strategic areas:

1. GlucoTrack® 2.0

The

objective of this project is to transform the existing device into a simple, easy to use wireless ear-clip which would measure glucose

and communicate the results seamlessly to any other platform through a wireless connection or a Bluetooth connection to a smart device

such as a smartphone, tablet or computer, eliminating the current handheld display. The result would be a user-friendly, inconspicuous

measuring device for the management of diabetes and pre-diabetes. We expect this new device to have much greater patient desire to purchase

and user acceptance. We also expect this new device will have a significantly lower cost to manufacture than our current device.

2. Digital Health Applications

We

are currently developing smart device applications (“Apps”) to facilitate the interaction of users with Glucotrack® and

the glucose data collected. The Apps will be compatible with both IOS and Android operating systems. We intend to develop Apps that support

the management of Type 2 diabetes and pre-diabetic patients by providing immediate feedback and insights that can be derived from glucose

measurements. Enhanced capabilities within the Apps may include goal setting, alarms and reminders, and diabetes management tips and

tools. It will also be designed to provide analyses of trends over multiple time periods. The goal is to provide relevant information

to guide patients in their journey to change behaviors and improve the management of their condition. The Apps are expected to have a

user-directed capability to connect with third party healthcare providers (physicians, dieticians, and nurse practitioners) in order

to receive professional guidance based on the accumulated information leading to improved management of the condition and better disease

outcomes.

Regulatory

Considerations

Healthcare

is heavily regulated by federal, state and local governments in the United States, and by similar authorities in other countries. Any

product that we develop must receive all relevant regulatory approvals or clearances, as the case may be, before it may be marketed in

a particular country. The laws and regulations affecting healthcare change regularly, thereby increasing the uncertainty and risk associated

with any healthcare- related venture. The United States government has in the past considered, is currently considering and may in the

future consider healthcare policies and proposals intended to curb rising healthcare costs, including those that could significantly

and adversely affect reimbursement for healthcare products such as GlucoTrack® devices. These policies have included, and may in

the future include: basing reimbursement policies and rates on clinical outcomes, the comparative effectiveness and costs of different

treatment technologies and modalities; imposing price controls and taxes on medical device providers; and other measures. Future significant

changes in the healthcare systems in any jurisdiction in which GlucoTrack® or our future products, if any, may be cleared for sale

could also have a negative impact on the demand for the GlucoTrack® or our future products, if any. These include changes that may

reduce reimbursement or payment rates for such products.

In

the United States, the federal government regulates healthcare through various agencies, including but not limited to the following:

(i) the FDA, which administers the Food, Drug, and Cosmetic Act, as well as other relevant laws; (ii) the Centers for Medicare &

Medicaid Services (“CMS”), which administers the Medicare and Medicaid programs; (iii) the Office of Inspector General, which

enforces various laws aimed at curtailing fraudulent or abusive practices including, by way of example, the Anti-Kickback Law, the Anti-Physician

Referral Law, commonly referred to as the Stark Law, the Anti-Inducement Law, the Civil Money Penalty Law, and the laws that authorize

the Office of Inspector General to exclude health care providers and others from participating in federal healthcare programs; and (iv)

the Office of Civil Rights which administers the privacy and security aspects of the Health Insurance Portability and Accountability

Act of 1996 (“HIPAA”). All of the aforementioned are agencies within the Department of Health and Human Services. Healthcare

is also provided or regulated, as the case may be, by the Department of Defense through its TriCare program, the Department of Veterans

Affairs under, among other laws, the Veterans Health Care Act of 1992, the Public Health Service within the Department of Health and

Human Services under the Public Health Service Act, the Department of Justice through the Federal False Claims Act and various criminal

statutes, and state governments under the Medicaid program and their internal laws regulating all healthcare activities. If and when

we receive FDA approval to market GlucoTrack® in the United States, we will be subject to regulation by some or all of the foregoing

agencies.

The

applicable regulatory schemes in the EU are significantly more diverse than those in the United States and do not lend themselves to

similar summary. Although the CE Mark system and the MDD require a minimum level of harmonization in the EU, each EU member country may

impose additional regulatory requirements. Because there are numerous EU member countries with distinct legal systems, the scope of potential

regulatory requirements in each of the EU countries (additional to the harmonized EU requirements) is difficult to summarize or predict.

Regulation

of the Design, Manufacture and Distribution of Medical Devices

Any

product that we develop must receive all relevant regulatory clearances or approvals, as the case may be, before it may be marketed in

a particular country.

Sales

of medical devices outside the United States are subject to foreign regulatory requirements that vary widely from country to country.

These laws and regulations range from simple product registration requirements in some countries to complex clearance and production

controls in others. As a result, the processes and time periods required to obtain foreign marketing approval may be longer or shorter

than those necessary to obtain FDA approval (as described below). These differences may affect the efficiency and timeliness of international

market introduction of GlucoTrack®. For countries in the EU, medical devices must display a CE Mark before they may be imported or

sold and must comply with the requirements of the MDD or the Active Implantable Medical Device Directive. On June 4, 2013, we received

our CE Mark approval for the first generation GlucoTrack® non-invasive glucose monitoring device from the Notified Body. Receipt

of the CE Mark allows us to market and sell the GlucoTrack® 1.0 model glucose monitoring device in EU member countries that have

adopted the MDD without being subject to additional national regulations with regard to demonstration of performance and safety. However,

although the MDD is applicable throughout the EU, in practice it does not ensure uniform regulation throughout the EU. Rather, the MDD

requires only a minimum level of harmonization in the EU. Accordingly, member countries may apply and enforce the MDD’s terms differently,

and certain EU member countries may request or require performance and/or safety data in addition to the MDD’s requirements from

time to time, on a case-by-case basis. The CE Mark also permits the sale in countries that have an MDD Mutual Recognition Agreement with

the EU. On August 31, 2015, we received approval from the Notified Body for improvements to the GlucoTrack® 1.0 model which simplify

and shorten (from approximately 2.5 hours to approximately half an hour) the initial calibration process for the device. These improvements

are intended to reduce the backlog created as purchasers of the device await calibration. In addition, we received approval from the

Notified Body on the updated intended use for the device, which expands the intended user population to include not only Type 2 diabetics,

but persons suffering from pre-diabetes conditions as well, which we believe represents a material expansion of the potential market

for the device. In December 2015, we received approval from the Notified Body for further improvements to the GlucoTrack® model 1.0

that increase the accuracy and efficacy of the device. On February 19, 2016, we received an extension of our ISO 13485:2003 certificate

and Annex II certification from the EU. The ISO 13485:2003 certification signifies that we have met the standards required for company-wide

implementation of device quality management system(s). The scope of the certification is design, development, manufacture and service

of non-invasive glucose monitoring systems for home use. Annex II also addresses quality control systems. The certification allows us

to self-certify certain modifications and changes and simplifies some of the reporting to and review by the relevant Notified Body. This

can shorten CE-mark review process of future GlucoTrack® enhancements or revisions. Without an Annex II certification, each new device

enhancement or modified version would be subject to the full EU CE-mark review process. The ISO 13485:2003 and Annex II certifications

enable us to potentially improve the time to market for product sales on new, enhanced or modified GlucoTrack® devices. On January

21, 2020, the Company announced that it has received CE Mark approval for a major enhancement to GlucoTrack, allowing for a user to perform

the calibration process by themselves, without the need for a certified calibrator. The initial CE Mark approval received for GlucoTrack

required a calibration process that took three hours to complete, required eight invasive finger stick reference measurements, needed

to be repeated every thirty days and required a certified calibrator to perform the calibration. After a series of successful enhancements

and approvals, the calibration process now takes just thirty minutes, requires just three invasive reference measurements, and needs

to be repeated only once every six months. With self-calibration, a user can now perform this simplified process in the privacy and convenience

of their own home.

In

the United States, under Section 201(h) of the Food, Drug, and Cosmetic Act, a medical device is an article which, among other things,

is intended for use in the diagnosis of disease or other conditions or in the cure, mitigation, treatment or prevention of disease in