GCTK US Equity☆

Item 1A. Risk Factors. 16

Item 1B. Unresolved Staff Comments. 31

Item 1C. Cybersecurity. 31

Item 2. Properties. 32

Item 3. Legal Proceedings. 32

Item 4. Mine Safety Disclosures 32

Item 6. [Reserved.] 34

Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 37

Item 8. Financial Statements and Supplementary Data. 37

Item 9A. Controls and Procedures. 37

Item 9B. Other Information. 38

Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspection. 38

PART III 39

Item 10. Directors, Executive Officers and Corporate Governance. 39

Item 11. Executive Compensation. 43

Item 14. Principal Accounting Fees and Services. 48

Item 15. Exhibits, Financial Statement Schedules. 49

SIGNATURES 51

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”) and

GlucoTrack, Inc., a Delaware corporation.

CAUTIONARY

NOTE REGARDING FORWARD LOOKING STATEMENTS

This

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

on page 16. 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

We

are a medical device company focused on the design, development and commercialization of novel technologies for people with diabetes.

Our mission is to become a leader in diabetes management by bringing to market innovative and cost-effective technologies that address

multiple verticals within the diabetes market.

The

Company was founded with a mission to develop GlucoTrack®, a noninvasive glucose monitoring device 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, which successfully received CE Mark approval, obtained glucose measurements via

a small sensor clipped onto one’s earlobe. A limited release beta test in Europe and the Middle East demonstrated the need for

an updated product with improved accuracy and human factors. As the glucose monitoring landscape rapidly moved away from point-in-time

measurement to continuous measurement since then, the Company recently determined that it would focus its efforts on developing its Implantable

continuous glucose monitor (“CGM”). As such, we have since withdrawn our CE Mark for GlucoTrack and are no longer pursuing commercialization of this product or development

of any further iterations.

The

Company is currently developing an Implantable CGM for use by Type 1 diabetes patients as well as insulin-dependent Type 2 patients.

Implant longevity is key to the success of such a device. We have recently completed a feasibility study successfully demonstrating that

a minimum two-year implant life is highly probable with the current sensor design. We have also initiated an animal study with an initial

prototype system that has thus far demonstrated a simple implant procedure and good functionality. The Company will initiate a long-term

animal trial in late Q4 as well as initiate development of its commercial device, also in late Q4, in preparation of regulatory submission

in late 2024 for a first in human study. We believe our technology, if successful, has the potential to be more accurate, more convenient

and have a longer duration than other implantable glucose monitors that are either in the market or currently under development.

We

are currently developing our own mobile companion application and a cloud-based solution 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.

Our

Senior Management team includes; Chief Executive Officer and President, Paul V. Goode PhD,

who has a decorated career developing innovative medical technologies, including at DexCom and MiniMed, CFO, James Cardwell, CPA who

has over 16 years of experience as a Chief Financial Officer and Chief Operating Officer with a concentration in both SEC financial reporting

and tax compliance, James P. Thrower PhD, Vice President of Engineering, a seasoned executive formerly of Sterling Medical Devices, Mindray

DS USA and DexCom, Inc. (“DexCom”), Mark Tapsak PhD, Vice President of Sensor

Technology, a medical research scientist who brings over 25 years of experience in the diabetes industry, including previous senior roles

at DexCom and Medtronic plc (“Medtronic”); and Drinda Benjamin, Vice President

of Marketing, an experienced commercial leader with experience at Medtronic and MiniMed, Abbott Diabetes Care, Senseonics and Intuitive

Surgical; and Vincent Wong, Vice President of Quality, a proven quality systems leader with extensive high-volume implantable device

manufacturing experience from Cirtec Medical Corp. (“Cirtec Medical”) and TOMZ Corporation. Luis

J. Malavé, formerly of Insulet Corp, Medtronic and MiniMed is the Chairman of the Company’s Board of Directors (the “Board”

or “Board of Directors”). We intend to continue to invest in our talent and to expand and strengthen all areas within the

Company.

History

On

September 27, 2021, our shelf Registration Statement on Form S-3 (File No. 333-259664) (the “Shelf Registration Statement”)

was declared effective by the Securities and Exchange Commission (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

October 7, 2022, the Company announced that it has acquired certain intellectual property related to a long-term implantable CGM from Paul V. Goode, the Chief Executive Officer and that it intends to develop the technology to

address the growing Type 1 and insulin-dependent Type 2 diabetes market.

On

April 13, 2023, the Company completed an underwritten public offering under which the Company received gross proceeds of approximately

$10 million for issuance of (i) 5,376,472 shares of common stock and (ii) 1,976,470 pre-funded warrants at a price to the public of $1.36

per share. After completing this transaction, the Company regained compliance with NASDAQ regarding the notice it received on November

22, 2022.

On

April 17, 2023, the Company announced the closing of a firm commitment underwritten public offering of shares of its common stock with

gross proceeds to the Company of approximately $10 million, before deducting underwriting discounts and other estimated expenses. The

offering consisted of 5,376,472 shares of common stock and 1,976,470 pre-funded warrants to purchase shares of common stock at a price

to the public of $1.36 per share (less $0.001 in exercise price per pre-funded warrant). The Company entered into an underwriting agreement

with Aegis Capital Corp. on April 13, 2023. The Company intends to use the net proceeds from this offering primarily for working capital

and general corporate purposes, which may include, without limitation, engaging in acquisitions or other business combinations or investments,

sales and marketing activities, general and administrative matters and capital expenditures.

On

July 25, 2023, the Company announced the completion and positive results of its feasibility study for its implantable continuous glucose

monitor technology for patients with Type 1 and Type 2 insulin-dependent diabetes. The primary goal of the feasibility study was to demonstrate

that the CGM sensor design could reliably report glucose measurements for two years post-implant. Laboratory bench testing confirmed

that a minimum two-year implant longevity is highly probable with the current sensor design. The implant longevity was independently

verified by a third-party using sensor parameters to simulate sensor performance over time. Given the positive results of the study,

the Company is now preparing for long-term animal studies, which are expected to begin later this year. On October 12, 2023, the Company

issued a press release with respect to its initial Animal Study.

Effective

as of October 6, 2023, Jolie Kahn resigned as Chief Financial Officer of GlucoTrack, Inc. (the “Company”) to pursue other

career interests. Ms. Kahn’s resignation was not because of any disagreement with the Company on any matter relating to the Company’s

operations, policies or practices, including accounting principles and practices.

On

October 11, 2023, the Company appointed James S Cardwell, 63, as Chief Financial Officer of the Company, effective immediately.

James

Cardwell has over 16 years of experience as a Chief Financial Officer and Chief Operating Officer with a concentration in both SEC financial

reporting and tax compliance. He also serves as the Chief Operating Officer of the CFO Squad LLC, an accounting firm, since July 2015

providing additional accounting and financial reporting services to the Company. In connection with his role at the CFO Squad LLC, he

also served as interim Chief Financial Officer at several entities.

Mr.

Cardwell has no family relationships with any of the Company’s directors or executive officers, and he is not a party to, and does

not have any direct or indirect material interest in, any transaction requiring disclosure under Item 404(a) of Regulation S-K.

On

October 11, 2023, in connection with Mr. Cardwell’s appointment as the Company’s Chief Financial Officer, Mr. Cardwell entered

into a consulting agreement (the “Cardwell Consulting Agreement”) with the Company. Pursuant to the terms of the Cardwell

Consulting Agreement, Mr. Cardwell will perform all duties typically required of a Chief Financial Officer. As compensation for his services,

the Company shall pay Mr. Cardwell One Thousand Five Hundred Dollars ($1,500) per month. The Cardwell Consulting Agreement is for a term

of one year. Either party may terminate the agreement upon thirty (30) day written notice.

On November 13, 2023, the Company

announced its decision to shift its strategic focus from non-invasive point-in-time glucose monitoring (“GlucoTrack 2.0”)

to CGM technology. This decision was driven by market trends indicating a growing preference for CGM and

supported by changes in clinical guidelines recommending CGM over point-in-time monitoring for certain patient populations. This historical

shift reflects the Company’s proactive response to evolving industry dynamics, aiming to better align its offerings with the needs of

individuals managing diabetes.

On

November 24, 2023, we received a letter from the Staff of Nasdaq notifying us that we have been granted an additional 180 calendar

days, or until May 20, 2024, to regain compliance with the Bid Price Rule. If at any time during the Extended Compliance Period, the

closing bid price of our Common Stock is at least $1.00 per share for a minimum of 10 consecutive business days, the Staff of Nasdaq

will provide written confirmation that we have achieved compliance with the Bid Price Rule. If we cannot demonstrate compliance

during the Extended Compliance Period, then the Staff of Nasdaq will provide notice that our Common Stock will be subject to

delisting. At that time, the Company may appeal the Staff’s determination to a hearings

panel. The stock price on March 12, 2024, was $0.31. The Company agreed to do a reverse stock split if the stock does not trade for

more than $1.00 for more than 10 consecutive days before May 20, 2024.

On

February 13, 2024, the Company entered into an exchange agreement with certain shareholders (the “Holders”), pursuant to

which the Company and the Holders agreed to exchange 4,381,953 of common stock purchase warrants owned by the Holders for 3,593,203 shares

of the Company’s common stock, par value $0.001 per share.

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 a metabolic disorder

that 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 2021, approximately 537 million adults worldwide,

between the ages of 20 and 79, or approximately 10% of the world’s adult population, were estimated to suffer from diabetes in

2021 (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 784 million adults worldwide

by 2045. The Centers for Disease Control and Prevention in its National Diabetes Statistics Report, 2023 provided crude estimates for

2021 that there are approximately 38 million people with diabetes in the U.S., of which 29.7 million have diagnosed diabetes. Among US

adults ages 18 years or older, there were 1.2 million new cases of diabetes diagnosed in 2021.

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, medications, 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. People with diabetes generally

manage their blood glucose levels by administering insulin or ingesting carbohydrates throughout the day to maintain blood glucose within

normal ranges. Normal ranges vary from person to person. In order to maintain blood glucose levels within normal ranges, people with

diabetes 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 these individuals 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. People with diabetes who take insulin

usually need to test more often than those who do not take insulin.

The

Company is developing a CGM that will allow continuous monitoring of glucose level, which the Company believes is a significant improvement

in quality compared to spot finger stick devices. Spot finger stick devices have been 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. In contrast, CGM systems involve the insertion of sensors into the body to measure glucose levels in the interstitial

fluid throughout the day and night, providing real-time data that shows trends in glucose measurements. Several published clinical studies

demonstrate that CGMs improve glycemic control in people with type 1 diabetes or people with insulin-requiring type 2 diabetes. As a

result, CGM use is rapidly increasing and has become the clinically recommended standard of care for these patients.

Despite

the benefits in glycemic control, many people with diabetes still have not adopted CGM. We believe that a significant market opportunity

exists for an innovative CGM devices that addresses the remaining barriers to adoption. According to a 2017 Diabetes Care study,

these barriers include the hassle of wearing devices all the time, dislike for having diabetes devices on the body, and dislike for how

diabetes devices look on the body. Additionally, the study reported that reasons that people discontinued using a CGM included the device

being uncomfortable or painful and the belief that the device is not accurate. 4 We believe that improved CGM devices that

address these barriers could provide significant benefits to patients, healthcare providers and payors, thereby increasing overall CGM

adoption and ongoing satisfaction.

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

Tanenbaum ML, Hanes SJ, Miller KM, Naranjo D, Bensen R, Hood KK. Diabetes device use in adults with type 1 diabetes: barriers to

uptake and potential intervention targets. Diabetes Care2017 Feb 1;40(2):181-7.

Our

Product

As mentioned in the “History” section above, the Company

retired its non-invasive point-in-time glucose monitoring (“GlucoTrack 2.0”) and shifted its focus to CGM technology. As such,

we are currently developing a long-term implantable Continuous Blood Glucose Monitor (CBGM) with no requirement for an additional wearable

component with maintained calibration status. The CBGM utilizes an intravascular approach, in which the device is implanted subcutaneously

and connected to a lead that is placed directly into a blood vessel. This facilitates continuous blood glucose measurements with zero

lag time. In comparison, all CGM systems measure glucose in the interstitial fluid, which lags behind blood glucose. The approach is based

on design elements, implant techniques, and implant tools commonly used for active implantable devices in the cardiovascular space. As

a result, it employs a recognized, established, and widely utilized implant procedure and device form factor.

In

the second quarter of 2023, we completed the laboratory-based feasibility study demonstrating that the CBGM sensor is capable of measuring

glucose for at least two years post-implant. By the end of 2023 we completed our initial preclinical in vivo animal study. This initial

preclinical study produced very strong results, demonstrating at least three months of well-sustained sensor life while also demonstrating

that the sensor is safe for animals. The study also indicated the CBGM is capable of a high level of measurement accuracy as compared

with conventional CGM technologies on the market.

In

the fourth quarter of 2023, we also initiated a human clinical device/system design and development program and expect to begin our first-in-human

(“FIH”) study in the first quarter of 2025. This will require a submission to, and eventual approval from, the eventual U.S.

Food and Drug Administration (“FDA”). We are targeting up to 30 patients across up to 3 US clinical centers; however, the

FDA may limit number of patients and/or clinical centers. Collecting data for sensor characterization and algorithm development, along

with implant procedure characterization and refinement, will be the primary goals of the FIH study. These results will drive any necessary

refinements to the system. Upon incorporation of any required refinements, we intend to conduct a pilot study of the eventual FDA pivotal

trial to prepare for the larger pivotal trial for FDA clearance.

In

parallel, we are also currently developing the Glucotrack CBGM a companion mobile application and a cloud-based solution to provide real

time, data-driven personalized tools to effectively help a user manage their diabetes and assist healthcare providers with making treatment

decisions. In addition to being a critical and effective management tool for the end user, we believe such data may be effectively monetized

for use by third parties such as insurers, pharmaceutical companies and advertisers.

We

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

future. Our strategy has been to select leaders in the manufacturing of similar or complementary products. We recently announced a development

and manufacturing agreement with Cirtec Medical (Brooklyn Park, MN), one of the leading medical device solutions providers of implantable

therapies. We require our critical suppliers and their manufacturing facilities to comply with applicable regulations in the jurisdictions

in which our devices are to be marketed (including ISO 13485 in the European Union (“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 our manufacturing partners will perform as expected.

Research

and Development

We

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

blood continuous glucose monitor, CBGM. 2023 was focused on proving the feasibility of the acquired technology, specifically that the

CBGM technology may last at least two (2) years in a human body, could accurately measure during that time, and would be safe to implant

and use. This was accomplished via three major studies: in vitro (in liquid solution), in silico (computer modeling and simulation),

and in vivo (animal study). These studies required development of laboratory and animal study prototypes necessary for these evaluations,

as well as partnering with experts in computational modeling of chemical materials and their interaction with the body. The in vitro

and in silico efforts successfully completed by late Q2, both confirming that a two-year implant life was possible. These results triggered

development of the animal prototype and initiation of those studies, which were successfully completed in late Q4 demonstrating very

good accuracy and safety profile.

In

2023, we began our migration from feasibility to product development. More specifically, we have partnered with an experienced contract

manufacturing organization, Cirtec Medical, to manufacture the implantable products for the commercial version of the CBGM system that

will be used in forthcoming clinical trials. Cirtec is one of the leading contract manufacturing organizations specializing in implantable

medical device production. These efforts have already begun and are expected to provide clinical trial use units in late Q4 of 2024.

In

parallel, we are developing a dedicated mobile app and cloud system for collecting and managing CBGM System data. The initial version

will be scaled appropriately for a FIH clinical trial. This version will serve as a foundation for the eventual commercial version, incrementally

increasing features along with regulatory guidance through clinical trials prior to commercialization.

With

respect to clinical trials, we are targeting Q1 2025 for initiation of the FIH trial. This trial is expected to use the commercial version

of the implantable system products (device and sensor), along with the scaled mobile app and cloud as described above. Throughout 2024,

we will identify potential clinical sites, obtain regulatory approval, and prepare the sites for trial initiation. We will also be working

with key physician partners to refine the implant, explant, and replacement procedures and associated tool set.

Likewise,

we will continue to increment the implantable sensor design for even better performance. These efforts will focus on techniques that

can lead to increased longevity of the implanted sensor, increased accuracy of the sensor, and simpler and safer implant, explant, and

replacement tools and procedures. Further to that, we continue to research materials and techniques that can reduce overall system cost.

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 2023 and 2022.

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 our 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 our devices, may be cleared for sale could also have a negative impact on the demand

for our devices. 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 (the “FDCA”) 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 (the

“FCA”) 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 our devices 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 Medical Device Regulation (“MDR”) 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 our devices. 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 MDR. However, although the MDR is applicable throughout the EU, in practice it does not

ensure uniform regulation throughout the EU. Rather, the MDR requires only a minimum level of harmonization in the EU. Accordingly, member

countries may apply and enforce the MDR’s terms differently, and certain EU member countries may request or require performance

and/or safety data in addition to the MDR’s requirements from time to time, on a case-by-case basis. The CE Mark also permits the

sale in countries that have an MDR Mutual Recognition Agreement with the EU.

In

the United States, under Section 201(h) of the FDCA, 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 man or other animals.

We believe that our devices will be classified as medical devices and subject to regulation by numerous agencies and legislative bodies,

including the FDA and its foreign counterparts. Devices are subject to varying levels of regulatory control, the most comprehensive of

which requires that a clinical evaluation be conducted before a device receives approval for commercial distribution. The FDA classifies

medical devices into one of three classes. Class I devices are relatively simple and can be manufactured and distributed with general

controls. Class II devices are somewhat more complex and require greater scrutiny. Class III devices are new and frequently help sustain

life.

In

the United States, a company generally can obtain permission to distribute a new device in two ways – through a so-called “510(k)”

premarket notification application or through a Section 515 premarket approval (“PMA”) application. The 510(k) submission

applies to any device that is substantially equivalent to a device first marketed prior to May 28, 1976 or to another device marketed

after that date, but which was substantially equivalent to a pre-May 28, 1976 device. These devices are either Class I or Class II devices.

Under the 510(k) submission process, the FDA will issue an order finding substantial equivalence to a predicate device (pre-May 28, 1976

or post-May 28, 1976 device that was substantially equivalent to a pre- May 28, 1976 device) and permitting commercial distribution of

that device for its intended use. A 510(k) submission must provide information supporting its claim of substantial equivalence to the

predicate device. The FDA permits certain low risk medical devices to be marketed without requiring the manufacturer to submit a premarket

notification. In other instances, the FDA may require that a premarket notification not only be submitted, but also be accompanied by

clinical data. If clinical data from human experiments are required to support the 510(k) submissions, these data must be gathered in

compliance with investigational device exemption regulations for investigations performed in the United States. The FDA review process

for premarket notifications submitted pursuant to section 510(k) should take about 90 days, but it can take substantially longer if the

FDA has concerns, and there is no guarantee that the FDA will clear the device for marketing, in which case the device cannot be lawfully

distributed in the United States. If the FDA finds that the device subject to the premarket notification is substantially equivalent

to a proper predicate device, then the FDA may “clear” that device for marketing. These devices are not “approved”

by the FDA. It is very unlikely, however, that the FDA will deem our CBGM subject to the 510(k) process, as opposed to the more time-consuming,

resource intensive and problematic PMA application process described below.

The

more comprehensive PMA process applies to a new device that either is not substantially equivalent to a pre-May 28, 1976 product or is

to be used in supporting or sustaining life or preventing impairment. These devices are normally Class III devices and can only be marketed

following approval of a PMA application. For example, most implantable devices are subject to the PMA approval process. Two steps of

FDA approval generally are required before a company can market a product in the U.S. that is subject to Section 515 PMA approval, as

compared to a Section 510(k) clearance. First, a company must comply with investigational device exemption regulations in connection

with any human clinical investigation of the device; however, those regulations permit a company to undertake a clinical study of a “non-significant

risk” device without formal FDA approval. Prior express FDA approval is required if the device is a significant risk device. If

there is any doubt as to whether a device is a “non-significant risk” device, companies normally seek prior approval from

the FDA. Normally, clinical studies of new diagnostic products are conducted in tandem with a cleared or approved device and treatment

decisions are based on the results from the existing diagnostic device. In such a setting, the FDA may consider the clinical trial as

one not posing a significant risk. However, FDA action is always uncertain and dependent on the contours of the design of the clinical

trial and the device and there is no assurance that the FDA would consider any proposed clinical trial as one posing a non-significant

risk. Moreover, before undertaking any clinical trial, the company sponsoring the trial and the investigator conducting the trial are

required by federal law to seek and obtain the approval of institutional review boards (“IRB”). An IRB weighs the risks and

benefits of a proposed trial to ensure that the human subjects are not exposed to unnecessary risk and reviews the informed consent form

to ensure that it meets federal requirements and accurately describes the risks and benefits, if any, of the clinical trial. IRB review

occurs annually, and annual re-approval is required. University medical centers as well as other entities maintain and operate IRB. Second,

the FDA must review a company’s PMA, which contains, among other things, clinical information acquired under the investigational

device exemption. The FDA will approve the PMA if it finds there is reasonable assurance that the device is safe and effective for its

intended use. The premarket approval process takes substantially longer than the 510(k) process.

The

Glucotrack CBGM is still under development and has not yet been approved for commercial sale in or outside the United States. Given the

implantable nature of the Glucotrack CBGM, it is most likely that the device will be assigned a Class III designation and need to follow

the PMA process for regulatory approval. The Company is preparing for this approach.

Even

when a clinical study has been approved or cleared by the FDA or a notified body or deemed approved, the study is subject to factors

beyond a manufacturer’s control, including, but not limited to the fact that the IRB at a given clinical site might not approve

the study, might decline to renew approval which is required annually, or might suspend or terminate the study before the study has been

completed. Also, the interim results of a study may not be satisfactory, in which case the sponsor may terminate or suspend the study

on its own initiative or the FDA or a notified body may terminate or suspend the study. There is no assurance that a clinical study at

any given site will progress as anticipated; there may be an insufficient number of patients who qualify for the study or who agree to

participate in the study, or the investigator at the site may have priorities other than the study. Also, there can be no assurance that

the clinical study will provide sufficient evidence to assure the FDA or a notified body that the product is safe and effective, a prerequisite

for FDA approval of a PMA. Even if the FDA or a notified body approves or clears a device, it may limit its intended uses in such a way

that manufacturing and distributing the device may not be commercially feasible.

After

approval to market is given, the FDA and foreign regulatory agencies, upon the occurrence of certain events, are authorized under various

circumstances to withdraw the clearance or approval or require changes to a device, its manufacturing process or its labeling or additional

proof that regulatory requirements have been met.

A

manufacturer of a device approved through the PMA process is not permitted to make changes to the device which affects its safety or

effectiveness without first submitting a supplement application to its PMA and obtaining FDA approval for that supplement. In some instances,

the FDA may require clinical trials to support a supplement application. Any change in the intended uses of a PMA device or a 510(k)

device requires an approval supplement. Exported devices are subject to the regulatory requirements of each country to which the device

is exported, as well as certain FDA export requirements.

The

Company plans to leverage the FDA approval for immediate ability to sell product in Switzerland (as well as the US). The Swiss competent

authority, SwissMedic, allows entry into the Swiss market with FDA approval. This will be an initial entry to the central European market

until CE Mark can be obtained. Geographical proximities enable servicing self-paying customers from nearby countries such as Germany,

France, Austria, and Italy.

The

Company plans to leverage the PMA clinical trial data, if successful, along with the associated development and manufacturing information,

for CE Mark certification. The company will choose a notified body and submit via the MDR regulations to obtain this necessary clearance

for marketing in EU member states. Upon approval, if granted, the Company may consider alternative markets that can leverage both the

FDA and CE Mark approvals.

Reimbursement

Considerations

In

the U.S. market, coverage and reimbursement from Medicare, Medicaid or other governmental healthcare programs or systems, and private

third-party healthcare payors is critical to the success of a medical device company. CGM systems have been broadly accepted by Medicare

and commercial third-party payors. Currently, Medicare covers CGM systems, which includes supplies necessary

for the use of the device under the Durable Medical Equipment, or DME, benefit category. Previously, Medicare coverage for CGM was only

available to Medicare patients who take at least three doses of insulin a day. The Local Coverage Determination, or LCD, that the Medicare

Administrative Contractors (MACs) released in April 2023 extends Medicare CGM coverage to all patients using insulin. The LCD also allows

coverage for patients not taking insulin if the patient has a history of problematic hypoglycemia.

There

is currently one commercially available implantable CGM product and the current reimbursement landscape includes coverage for the product

itself, coverage for the implantation process and coverage for the removal and reinsertion process. Additionally, an LCD was recently

released (NGS ICGM LCD - Effective 4/1/2024) allowing for expanded access of this product to include all people with diabetes using insulin,

removing the previous requirement for at least three doses of insulin a day. Like non-implantable CGM, the LCD also allows coverage for

patients not taking insulin if the patient has a history of problematic hypoglycemia.

Even

though CGM coverage is broad, we anticipate that sales volumes and prices of our implantable Continuous Blood Glucose Monitor (CBGM)

product will depend in large part on the availability of adequate reimbursement from Medicare and third-party payors. Medicare reimburses

medical devices in a variety of ways depending on where and how the device is used. However, Medicare only provides reimbursement if

CMS determines that the device should be covered and that the use of the device is consistent with the coverage criteria. A coverage

determination can be made at the national level by CMS or at the local level by the Medicare administrative contractor (formerly called

carriers and fiscal intermediaries) or a private contractor that processes and pays claims on behalf of CMS for the geographic area where

the services were rendered. Obtaining a coverage determination, whether local or national, is a time-consuming, expensive and highly

uncertain proposition, especially for a new technology, and inconsistent local determinations are possible. Our inability to obtain a

favorable coverage determination for our CBGM product may adversely affect our ability to market the product and thus, the commercial

viability of the product.

Additionally,

we believe that the overall escalating cost of medical products and services has led to and will continue to lead to increased pressures

on the healthcare industry to reduce the costs of products and services. There can be no assurance that third-party reimbursement and

coverage will be available or adequate, or that future legislation, regulation, or reimbursement policies of third-party payors will

not adversely affect the demand for our products or our ability to sell these products on a profitable basis. The unavailability or inadequacy

of third-party payor coverage or reimbursement could have a material adverse effect on our business, operating results, and financial

condition. Until adequate reimbursement or insurance coverage is established, patients may have to bear the financial cost of our products.

To

mitigate these risks, we are starting our reimbursement planning process early, well in advance of obtaining regulatory approval. We

have engaged a leading reimbursement consultancy to complete an analysis of the current landscape for CGM technologies. Additionally,

since our product is an implantable device and very similar in form factor and procedure to commercially available cardiovascular devices,

we are also assessing the current reimbursement landscape for those technologies. This will enable us to craft a reimbursement strategy

that is best suited to our CBGM product and reflects the different healthcare providers that may be involved in utilizing the product.

Our

reimbursement strategy also incorporates coverage for the product , the implantation procedure, and the removal and reinsertion procedures.

While we can proactively prepare our reimbursement strategy, some activities such as coding applications, if needed, are not able to

be executed until FDA approval is obtained.

Outside

the United States, availability of reimbursement from third parties varies widely from country to country. Within the EU member countries,

healthcare reimbursement, coverage regulations, and systems differ significantly. An EU reimbursement analysis and strategy may begin

if and when we decide to enter the EU market.

Anti-Fraud

and Abuse Rule

There

are extensive United States federal and state laws and regulations prohibiting fraud and abuse in the healthcare industry that can result

in significant criminal and civil penalties that can materially affect us, if and when we receive FDA approval to market our products

in the United States. These federal laws include, by way of example, the following:

Sanctions

for violating these federal laws include criminal and civil penalties that range from punitive sanctions, damage assessments, monetary

penalties, imprisonment and/or denial of Medicare and Medicaid payments or exclusion from the Medicare and Medicaid programs, or both.

These laws also impose an affirmative duty on those receiving Medicare or Medicaid funding to ensure that they do not employ or contract

with persons excluded from the Medicare and other government programs.

Many

states have adopted or are considering legislative proposals similar to the federal fraud and abuse laws, some of which extend beyond

the Medicare and Medicaid programs, to prohibit the payment or receipt of remuneration for the referral of patients and physician self-referrals

regardless of whether the service was reimbursed by Medicare or Medicaid. Many states have also adopted or are considering legislative

proposals to increase patient protections, such as limiting the use and disclosure of patient specific health information. These state

laws also impose criminal and civil penalties similar to the federal laws.

Similarly,

the EU and EU member countries may have similar fraud and abuse laws which would regulate our business in those jurisdictions. However,

given the diversity of legal systems within the EU, it is difficult to predict with specificity what anti-fraud legislation and regulations

may be implemented and the penalties that they impose.

In

the ordinary course of their business, medical device manufacturers and suppliers have been and are subject regularly to inquiries, investigations

and audits by federal and state agencies that oversee these laws and regulations. Recent federal and state legislation has greatly increased

funding for investigations and enforcement actions, which have increased dramatically over the past several years. This trend is expected

to continue. Private enforcement of healthcare fraud also has increased due in large part to amendments to the civil FCA that were designed

to encourage private persons to sue on behalf of the government. These whistleblower suits by private persons, known as qui tam relators,

may be filed by almost anyone, including present and former patients or nurses and other employees, as well as competitors. HIPAA, in

addition to its privacy provisions, created a series of new healthcare-related crimes.

As

federal and state budget pressures continue, federal and state administrative agencies may also continue to escalate investigation and

enforcement efforts to root out waste and to control fraud and abuse in governmental healthcare programs. A violation of any of these

federal and state fraud and abuse laws and regulations could have a material adverse effect on a supplier’s liquidity and financial

condition. An investigation into the use of a device by physicians may dissuade physicians from recommending that their patients use

the device. This could have a material adverse effect on our ability to commercialize our products.

The

Privacy Provisions of HIPAA

In

the United States, HIPAA, among other things, protects the privacy and security of individually identifiable health information by limiting

its use and disclosure. HIPAA directly regulates “covered entities,” such as healthcare providers, insurers and clearinghouses,

and regulates “business associates,” with respect to the privacy of patients’ medical information. All entities that

receive and process protected health information are required to adopt certain procedures to safeguard the security of that information.

It is uncertain whether we would be deemed to be a covered entity under HIPAA and, owing to changes in the law, it is uncertain, based

on our current business model, whether we would be a business associate. Nevertheless, we will likely be contractually required to physically

safeguard the integrity and security of any patient information that we receive, store, create or transmit in the United States. If we

fail to adhere to our contractual commitments, then our physician, hospital or insurance customers may be subject to civil monetary penalties,

which could adversely affect our ability to market our devices. Changes in the law wrought by the provisions of Health Information Technology

for Economic and Clinical Health (“HITECH”) Act, enacted as part of the American Recovery and Reinvestment Act of 2009 (“ARRA”),

increase the duties of business associates and covered entities with respect to protected health information that thereby subject them

to direct government regulation, increasing its compliance costs and exposure to civil monetary penalties and other government sanctions.

While HITECH does not alter the definition of a business associate, it makes it more likely that covered entities with whom we are likely

to do business in the United States, if and when we receive FDA approval to market GlucoTrack in the United States, will require us to

enter into business associate agreements.

Intellectual

Property

We

are pursuing a proactive intellectual property strategy, which includes patent filings in multiple jurisdictions, including the United

States and other commercially significant markets. We understand the importance of obtaining patent and trade secret protection for new

technologies, products and processes. Our success will depend in large part on our ability to file for and obtain patent protection of

our principal products and procedures, to defend existing or future patents, to maintain trade secrets and to operate without infringing

upon the proprietary rights of others.

We

currently have a published U.S. patent application number 17/932,238 Methods and Systems for Continuously Monitoring the Glucose Level

of a Patient, awaiting review as well as its associated international application PCT/US22/76435. Multiple new filings are planned

for 2024 that will broaden the intellectual property protection for our core product, the Glucotrack CBGM. We have also obtained trademark

registrations for Glucotrack® in the U.S. and Europe. and various other jurisdictions.

We

believe that our intellectual property and products do not and will not infringe patents or violate proprietary rights of others, although

it is possible that our existing patent rights may not be valid or that infringement of existing or future patents or proprietary rights

may occur. Litigation may be necessary to defend or enforce our patent rights or to determine the scope and validity of the proprietary

rights of others. Defense and enforcement of patent claims can be expensive and time consuming, even in those instances in which the

outcome is favorable and could result in the diversion of substantial resources and management time and attention from our other activities.

An adverse outcome could subject us to significant liability to third parties, require us to obtain licenses from third parties, require

us to alter our products or processes, or require that we cease altogether any related research and development activities or product

sales.

Patent

protection is highly uncertain and involves complex legal and factual questions and issues. The patent application and issuance process

can be expected to take several years and entails considerable expense. There can be no assurance that patents will be issued as a result

of any applications or that any patents resulting from such applications, or our existing patents will be sufficiently broad to afford

protection against competitors with similar or competing technology. Patents that we obtain may be challenged, invalidated or circumvented,

or the rights granted under such patents may not provide us with any competitive advantages.

Competition

The

market for CGM devices is intensely competitive, subject to rapid change and significantly affected by new product introductions. Three

companies, Abbott Laboratories (“Abbott”), DexCom and Medtronic currently account for substantially all of the worldwide

sales of CGM systems. These products are all transcutaneous systems with sensor longevities of 7-15 days. These systems have a sensor

that is worn on the back of the upper arm or the abdomen, depending on the system. The sensor measures glucose in the interstitial fluid,

which lags glucose in the blood, so the CGM readings may lag about 15-20 minutes behind blood glucose readings. Depending on the system,

the sensor provides glucose readings every one to five minutes and streams directly to the users’ compatible smartphone. Following

the insertion of a new Abbott FreeStyle Libre 3 or DexCom G7 sensor, there is a warm-up period of 30-60 minutes, depending on the system,

during which time no readings are available. After that period, both systems are factory-calibrated, which means that no fingersticks

(blood glucose measurements using a glucometer) are required for calibration. For the Medtronic Guardian 4 system, there is a 2-hour

warm-up period; after that period, no fingersticks are required for calibration when using as a part of the MiniMed 780G insulin pump

system.

There

is currently one implantable CGM that is commercially available in the US and Europe: Senseonics Holdings, Inc. The sensor is inserted

by a doctor under the skin of the upper arm and lasts up to 180 days. The wearable smart transmitter provides on-body vibe alerts and

is worn over the sensor using a daily adhesive. There is a 24-hour warm up period with this system and, after that period, fingersticks

are required for calibration twice a day for the 1st 21 days and then once daily. Similar to the transcutaneous systems, this system

also measures glucose in the interstitial fluid.All four competitors are either publicly traded or are divisions of publicly traded companies,

and they enjoy several competitive advantages, including:

● significantly greater name recognition;

● established distribution networks;

As

a result, we cannot ensure that we will be able to compete effectively against these companies or their products.

There

are several new and smaller players that have obtained clearance to market in EU or Asia. Their systems are transcutaneous systems with

similar form factors and longevity as the Abbott, DexCom and Medtronic systems. None of these companies has yet achieved a significant

user base.

Additionally,

Medtronic and other companies have developed or are developing, insulin pumps integrated with CGM systems that provide, among other things,

the ability to suspend insulin administration while the user’s glucose levels are low and to automate basal or bolus insulin dosing.

Both Abbott and DexCom have received FDA clearance to integrate certain versions of their sensors into automated insulin delivery systems.

Although

we face potential competition from many different sources, we believe that our technology, experience and scientific knowledge provide

us with competitive advantages of accuracy, longevity, discretion and usability, though our technology is not in any way integrated with

an automatic insulin delivery system.

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