GCTK 10-K & 10-Q changes, risk factors and insider trading
Glucotrack, Inc. · Nasdaq · Surgical & Medical Instruments & Apparatus · CIK 1506983 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets.”
New heading “We have a substantial number of convertible securities outstanding and the exercise of our outstanding warrants could have a dilutive effect on our Common Stock.”
New heading “Our charter documents, Delaware law, and our commercial contracts may contain provisions that may discourage an acquisition of us by others and may prevent attempts by our stockholders to replace or remove our current management.”
Largest changes
“Factors such as geopolitical events (including the ongoing wars in Iran, Ukraine and Israel and the risk of increased tensions between China and Taiwan), inflationary pressures, public health crises, and U.S. election cycles, and changes in government administration and policies have caused extreme volatility and disruptions in the capital and credit markets in recent years. Uncertainty or unfavorable global economic conditions could result in a variety of impacts to our business, including adversely impacting our ability to raise additional capital when needed on acceptable terms, if at all.”see in full comparison
“We may not have sufficient liquidity to meet our anticipated obligations over the next year from the issuance of the financial statements contained in this Annual Report. We have incurred net losses and negative cash flows from our operations and comprehensive loss since our inception and as of December 31, 2025, we had an accumulated deficit of $151.8 million. As of December 31, 2025, we had cash and cash equivalents of $7.4 million. There are no assurances that we will be able to raise additional capital or do so on terms favorable to us. …”see in full comparison
“Our ability to continue as a going concern is dependent on our available cash, how well we manage that cash, and our operating requirements. If we are unable to raise additional capital when needed, we could be forced to curtail operations or take other actions such as implementing additional restructuring and cost reductions, disposing of one or more product lines and/or, selling or licensing intellectual property. If we are unable to continue as a going concern, we may be forced to liquidate our assets, which would have an adverse impact on our business and developmental activities. …”see in full comparison
“We may be required to monitor our market value of listed securities closely and, if necessary, take actions such as issuing additional securities, raising additional capital or undertaking other corporate actions to seek to maintain compliance, any of which could dilute our existing shareholders, increase our costs, or divert management’s attention. …”see in full comparison
“We may not have sufficient liquidity to meet our anticipated obligations over the next year from the issuance of the financial statements contained in this Annual Report. We have incurred net losses and negative cash flows from our operations and comprehensive loss since our inception and as of December 31, 2024, we had an accumulated deficit of $132.5 million. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.”see in full comparison
If we are unable to continue to satisfy the applicable continued listing requirements of Nasdaq, our Common Stock could be delisted, and we and our stockholders could face significant material adverse consequences. In addition, Nasdaq has recently proposed a new $5 million market value of listed securities requirement that we may not satisfy and therefore could cause our Common Stock to be delisted by Nasdaq on an imminent basis, if approved by the SEC.see in full comparison
Full comparison: every changed paragraph (44)
We
are a medical device company with a limited operating history. We are not profitable and have incurred losses since our inception.
To To
date we have not generated material revenue from the sale of products, and we do not anticipate that we will report operating
income income
in the foreseeable future. Our initialfirst product was removed from international markets as the Company withdrew its CE Mark by
2023. As of 2023, all commercialization and development efforts ceased of the first product. Our second and novel new product,
Glucotrack CBGM, has not been approved for marketing in the United States or internationally and is currently
under preclinical
development. We continue to incur research and development and selling, marketing and general and administrative expenses
related to our operations, development and commercialization of our first product. Our operatingnet losses for the years ended December
31, 20242025 and 20232024 were approximately $22.6$19.4 million and $7.1$22.6 million,
respectively, and we had an accumulated deficit of approximately
$132.0 $151.8 million as of December 31, 2024.2025. We expect to continue to
incur losses for the foreseeable future, and these losses will likely
increase as we develop and prepare to commercialize Glucotrack
CBGM. If we are not successful in developing, manufacturing and distributing
Glucotrack CBGM, or if Glucotrack CBGM does not achieve
market acceptance, we may never become profitable. Even if we achieve profitability
in the future, we may not be able to sustain
profitability in subsequent periods.
AsWhen
we continue to evolve from a company primarily involved in development to a company also involved in commercialization, we may encounter
difficulties in managing our growth and expanding our operations successfully.
We
anticipate that, as our operations expand and, assuming that our development, testing, pre-clinical studies and human clinical trials
are successful, we will need
to expandbuild and develop our manufacturing, marketing and sales capabilities by contracting with third parties.capabilities. Maintaining theseand relationships and
managing our future growth will
impose significant added responsibilities on members of our management team. We must be able to manage
our development efforts effectively;
manage our clinical trials effectively; hire, train and integrate additional management, development,
administrative and sales and marketing
personnel; improve managerial, development, operational and finance systems; and expand our facilities,
all of which may impose a strain
on our administrative and operational infrastructure.
We may not have sufficient liquidity to meet our anticipated obligations over the next year from the issuance of the financial statements contained in this Annual Report. We have incurred net losses and negative cash flows from our operations and comprehensive loss since our inception and as of December 31, 2025, we had an accumulated deficit of $151.8 million. As of December 31, 2025, we had cash and cash equivalents of $7.4 million. There are no assurances that we will be able to raise additional capital or do so on terms favorable to us. Our recurring losses from operations and projected future cash flow requirements raise substantial doubt about our ability to continue as a going concern without sufficient capital resources and we have included explanatory information in the notes to our financial statements for the year ended December 31, 2025, with respect to this uncertainty, and the report of our independent registered public accounting firm with respect to our audited financial statements for the year ended December 31, 2025 included an emphasis of matter for this as well. Our consolidated financial statements do not include any adjustments that might result from the outcome of this going concern uncertainty and have been prepared under the assumption that we will continue to operate as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
Our ability to continue as a going concern is dependent on our available cash, how well we manage that cash, and our operating requirements. If we are unable to raise additional capital when needed, we could be forced to curtail operations or take other actions such as implementing additional restructuring and cost reductions, disposing of one or more product lines and/or, selling or licensing intellectual property. If we are unable to continue as a going concern, we may be forced to liquidate our assets, which would have an adverse impact on our business and developmental activities. In such a scenario, the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements.
We
may not have sufficient liquidity to meet our anticipated obligations over the next year from the issuance of the financial
statements contained in this Annual Report. We have incurred net losses and negative cash flows from our operations and
comprehensive loss since our inception and as of December 31, 2024, we had an accumulated deficit of $132.5 million. These
conditions raise substantial doubt about the Company’s ability to continue as a going concern.
Positive
results from the limited safety and performance pre-clinical trials and first-in-human acute clinical studies that we have conducted
should not be relied upon as evidence that early-stage or large-scale clinical trials will succeed. Despite efforts to choose the proper
proper animal model reflecting our intended use, our pre-clinical animal trials and first-in-human acute clinical studies cannot be
a guarantee
of clinical trial success because human physiology and anatomy are different. Because of the sample size, possible
variation in methodology
or differences in physiology, the results of these pre-clinical trials may not be indicative of future
results. We will be required to
demonstrate through multiple well-controlled clinical trials that Glucotrack CBGM or future product
candidates, if any, are safe and
effective for their intended uses.
Further,
the Glucotrack CBGM or our future product candidates, if any, may not be cleared or approved, as the case may be, even if the clinical
data are satisfactory and support, in our view, its or their clearance or approval. The FDA or other non-U.S. regulatory authorities
may disagree with our trial design or interpretation of the clinical data. In addition, any of these regulatory authorities may change
requirements for the clearance or approval of a product candidate even after reviewing and providing comment on a protocol for a pivotal
clinical trial that has the potential to result in FDA approval. In addition, any of these regulatory authorities may also clear or approve
a product candidate for fewer or more limited usespatient populations than we request or may grant clearance or approval contingent on the
performance of
costly post-marketing clinical trials. In addition, the FDA or other non-regulatory authorities may not approve the labeling
claims necessary
or desirable for the successful commercialization of Glucotrack CBGM or our future product candidates, if any.
We
are highly dependent on the success of our primary product candidate, Glucotrack CBGM, and cannot give any assurance that it will receive
regulatory regulatory
approval or clearance or be successfully commercialized.
We
are highly dependent on the success of our primary product candidate, Glucotrack CBGM. We cannot give any assurance that the FDA will
permit permit
us to clinically test the device, nor can we give any assurance that the clinical trials will be successful or that Glucotrack
CBGM will
receive regulatory clearance or approval or be successfully commercialized, for a number of reasons, including, without limitation,
the the
potential introduction by our competitors of more clinically-effective or cost-effective alternatives, failure in our sales and marketing
efforts, or the failure to obtain positive coverage determinations or reimbursement. Any failure to obtain approval to conduct clinical
clinical trials, favorable clinical data, clearance or approval of or to successfully commercialize Glucotrack CBGM would have a material adverse
adverse effect on our business.
The
diabetes market is currently seeing increasing use of GLP-1 drugs for the treatment of obesity and Type 2 diabetes. While we believe
that GLP-1s arehave
been used as a companion product and can be used in conjunction with CGM systems, such drugs could potentially compete with the Glucotrack
CBGM and impact
successful commercialization.commercialization particularly as it applies to patients with Type 2 diabetes not dependent on insulin as well as those with
pre-diabetes conditions.
Our
clinical trials may be suspended or terminated at any time by the FDA, other regulatory authorities, and/or the IRB for any given site
or us.
Any failure or significant delay in completing clinical trials for the Glucotrack® CBGM or future product candidates, if any, could
materially harm our financial results and the commercial prospects for our product candidates.
Regulatory
approval of a PMAClass orIII PMAmedical supplementdevice is not guaranteed, and the approval will take several years when factoring in clinical trial timelines.
The FDA also has substantial discretion in the medical device clearance or approval processes. Despite the time and expense exerted,
failure can occur at any stage, and we could encounter problems that cause us to abandon clinical trials or to repeat or perform additional
pre-clinical studies and clinical trials. The number of pre-clinical studies and clinical trials that will be required for FDA clearance
or approval varies depending on the medical device candidate, the disease or condition that the medical device candidate is designed
to address and the regulations applicable to any particular medical device candidate. The FDA can delay, limit or deny clearance or approval
of a medical device candidate for many reasons, including:
If
the Glucotrack CBGM or our future product candidates, if any, fail to achieve marketsufficient acceptance,reimbursement and coverage, we may not be able
to generate significant
revenue or achieve or sustain profitability.
The
coveragereimbursement status and reimbursement statuscoverage of newly cleared or approved medical devices is uncertain, and failure to obtain adequate coverage
and adequate reimbursement could limit our ability to market Glucotrack CBGM or future product candidates, if any, and may inhibit our
ability to generate revenue from Glucotrack CBGM or our future product candidates, if any, that may be cleared or approved.
There
is significant uncertainty related to the third-party coverage and reimbursement of newly cleared or approved medical devices. The commercial success
success of Glucotrack CBGM or our future product candidates, if any, in both domestic and international markets will depend in part on
the availability
of coverage and adequate reimbursement from third-party payors, including government payors, such as the Medicare and
Medicaid programs,
managed care organizations and other third-party payors. Government and other third-party payors are increasingly
attempting to contain
health care costs by limiting both coverage and the level of reimbursement for new products and, as a result, they
may not cover or provide
adequate payment for Glucotrack CBGM or our future product candidates, if any. These payors may conclude that
our products are not as
safe or effective as existing devices or that the overall cost of using one of our devices exceeds the overall
cost of the competing
device, and third-party payors may not approve Glucotrack CBGM or our future product candidates, if any, for coverage
and adequate reimbursement.
Furthermore, deficit reduction and austerity measures in the United States and abroad may put further pressure
on governments to limit
coverage of, and reimbursement for, our products. The failure to obtain coverage and adequate reimbursement for
Glucotrack CBGM or our
future product candidates, if any, or health care cost containment initiatives that limit or restrict reimbursement
for such products,
may reduce any future product revenue.
Our
inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product
liability liability
claims could prevent or inhibit the commercialization of products we develop. We currently do not maintain product
liability insurance in the United States and maintain product liability insurance in Australia up to
$5,000 $10.0 Million AUS Dollars per
claim and in the aggregate. AlthoughRegardless of whether we havemaintain product liability coverage,insurance coverage in any jurisdiction, including
Australia or in the future the United States, we may havebe required to pay amounts awarded by a court or
negotiated in a settlement that
exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be
able to obtain, sufficient
capital to pay such amounts.
We
do not own or operate manufacturing facilities for clinical or commercial production of Glucotrack CBGM, other than a prototype lab.
We have no experience in medical device manufacturingresearch and prototyping
lab. We, therefore, lack the resources and theinternal capability to manufacture the Glucotrack CBGM on
a commercial scale.
The
funding that we received through the Israeli Innovation Authority (“IIA”) for research and development activities restricts
our ability to manufacture products or to transfer technology outside of Israel.Israel of its first product which we have taken off the market
and no longer have available for sale.
On
March 4, 2004, the IIA agreed to provide us with a grant of 420 New Israeli Shekels (“NIS”), or approximately $93 at an
exchange rate of 4.502 NIS/dollar (the exchange rate in effect on such date), for our plan to develop a non-invasive blood glucose
monitor (the “development plan”). This grant constituted 60% of our research and development budget for the development
plan at that time. Due to our acceptance of this grant, we are subject to the provisions of the Israeli Law for the Encouragement of
Industrial Research and Development, 1984 (the “R&D Law”). Among other things, the R&D Law restricts the ability
to sell or transfer rights in technology or know-how developed with IIA funding or transfer any Means of Control (as defined in the
R&D Law) of us to non-Israeli entities. The Industrial Research and Development Committee at the IIA (the “research
committee”) may, under special circumstances, approve the transfer outside of Israel of rights in technology or know-how
developed with IIA funding subject to certain conditions, including the condition that certain payments be made to the IIA.
Additionally, products developed with IIA funding outside of Israel cannot be manufactured without the approval of a research
committee. The restrictions regarding the sale or transfer of technology or manufacturing rights out of Israel could have a material
adverse effect on the ability to enter into strategic alliances or enter into merger or acquisition transactions in the future that
provide for the sale or transfer of technology or manufacturing rights.
In
late 2023, the Company abandoned pursuit of its Israeli originated first generation product development programsprograms, topincluding focusthe
abandonment of any associated intellectual property and intangible assets. The Company is solely focused on
its nextsecond generationproduct,
which CBGMis uniquely designed and patented, under product and clinical development efforts forin FDAthe marketUnited approval.States. The Company’s Israeli subsidiary is in the process of dissolution and does not conduct any operating activities.
On March 4, 2004, the IIA agreed to provide us with a grant of 420,000 New Israeli Shekels (“NIS”), or approximately $93 thousand at an exchange rate of 4.502 NIS/dollar (the exchange rate in effect on such date), for our plan to develop a non-invasive blood glucose monitor (the “development plan”). This grant constituted 60% of our research and development budget for the development plan at that time. Due to our acceptance of this grant, we are subject to the provisions of the Israeli Law for the Encouragement of Industrial Research and Development, 1984 (the “R&D Law”). Among other things, the R&D Law restricts the ability to sell or transfer rights in technology or know-how developed with IIA funding or transfer any Means of Control (as defined in the R&D Law) of us to non-Israeli entities. The Industrial Research and Development Committee at the IIA (the “research committee”) may, under special circumstances, approve the transfer outside of Israel of rights in technology or know-how developed with IIA funding subject to certain conditions, including the condition that certain payments be made to the IIA. Additionally, products developed with IIA funding outside of Israel cannot be manufactured without the approval of a research committee. The restrictions regarding the sale or transfer of technology or manufacturing rights out of Israel could have a material adverse effect on the ability to enter into strategic alliances or enter into merger or acquisition transactions in the future that provide for the sale or transfer of technology or manufacturing rights.
Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets.
Factors such as geopolitical events (including the ongoing wars in Iran, Ukraine and Israel and the risk of increased tensions between China and Taiwan), inflationary pressures, public health crises, and U.S. election cycles, and changes in government administration and policies have caused extreme volatility and disruptions in the capital and credit markets in recent years. Uncertainty or unfavorable global economic conditions could result in a variety of impacts to our business, including adversely impacting our ability to raise additional capital when needed on acceptable terms, if at all.
If we are unable to continue to satisfy the applicable continued listing requirements of Nasdaq, our Common Stock could be delisted, and we and our stockholders could face significant material adverse consequences. In addition, Nasdaq has recently proposed a new $5 million market value of listed securities requirement that we may not satisfy and therefore could cause our Common Stock to be delisted by Nasdaq on an imminent basis, if approved by the SEC.
In
order to remain listed on Nasdaq, we must satisfy minimum financial and other continued listing requirements and standards, including
those regarding director independence and independent committee requirements, minimum stockholders’ equity, minimum share price,
and certain corporate governance requirements.requirements (the “Nasdaq Listing Rules”).
Because
we were not in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on Nasdaq as
set forth in Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”), at the time we were notified about the non-compliance
non-compliance with the Minimum Stockholders’ Equity Requirement, we were not eligible to submit a plan to regain compliance
with the Staff. However,
we timely requested a hearing before the Nasdaq Hearingshearings Panel (the “Panel”)panel and paid the fee,
which resulted in a stay of any suspension or delisting
action pending the hearing. The hearing took place on July 9, 2024, and on
August 5, 2024, we received the decision of the Panel,panel, and
they granted us an extension until November 18, 2024 to regain compliance
with the Minimum Stockholders’ Equity Requirement.
On
November 19, 2024, the Company received a compliance letter (the “Compliance Letter”) from Nasdaq, informing the Company
that it had regained compliance with the Minimum Stockholders’ Equity Requirement. The Compliance Letter noted, that because the
the Company’s bid price hashad closed below the minimum required by the Bid Price Rule following the November Offering (defined blow),
the the
Panel hashad determined to impose on the Company a Discretionary Panel Monitor, pursuant to Listing Rule 5815(d)(4)(B), for a period
of of
one year from the date of the Compliance Letter, to ensure that the Company maintainsmaintained long-term compliance with the Minimum Stockholders’
Stockholders’ Equity Requirement, the Bid Price Rule, and all ofother Nasdaq’sNasdaq continuedListing listing requirements.Rules.
On December 31, 2024, Nasdaq notified us that for at least the last 30 consecutive business days, the bid price for our Common Stock had closed below the minimum $1.00 per share requirement for continued inclusion on the Nasdaq Capital Market pursuant to the Bid Price Rule. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we had a compliance period of 180 calendar days, or until June 30, 2025, to regain compliance with the Bid Price Rule. On February 3, 2025, the Company implemented a reverse stock split at a ratio of 1-for-20 to regain compliance with the Bid Price Rule. On April 2, 2025, we received a letter from Nasdaq notifying us that as a result of non-compliance with the Bid Price Rule, Nasdaq Staff had determined to delist our securities. We timely submitted a hearing request to the hearings panel on April 9, 2025, and paid the fee, which resulted in a stay of any suspension or delisting action pending the hearing. The hearing took place on May 13, 2025, and on June 2, 2025, we received the decision of the panel granting us an extension until July 3, 2025, to regain compliance with the Bid Price Rule. On June 13, 2025, the Company implemented a reverse stock split at a ratio of 1-for-60 to regain compliance with the Bid Price Rule.
On July 18, 2025, we received notice from Nasdaq that we had regained compliance with the Bid Price Rule. The Panel retained jurisdiction over the Company through September 29, 2025. On November 5, 2025, the Company was notified by Nasdaq Staff that the Company was in compliance with all Nasdaq Listing Rules.
In addition to the foregoing requirements, Nasdaq has recently proposed a new listing requirement that would require each Nasdaq listed issuer to maintain a minimum market value of listed securities of at least $5 million. Under this proposal, if the value of an issuer’s listed securities, as measured by each applicable trading day’s closing price, continues to be less than $5 million for a period of 30 consecutive trading days, the issuer’s securities would immediately be delisted, with no compliance or cure period. The proposed rule would also preclude an issuer’s ability to seek stay of delisting during any appeals process, and would preclude Nasdaq hearings panels from reversing the delisting determination to situations where there was an error and the company never actually failed to satisfy the requirement. The panel would also not be able to consider any facts indicating that issuer subsequently regained compliance with the requirement or grant an issuer any additional time to regain compliance. The proposed rule is subject to review and approval by the SEC, and it is unknown whether the SEC will approve the proposal. If approved by the SEC, the rule could become effective on an imminent basis. Our Common Stock currently trades at levels that are below the $5 million aggregate market value threshold proposed by Nasdaq. As such, if this proposal is approved by the SEC, our Common Stock could be imminently delisted by Nasdaq on this basis.
We may be required to monitor our market value of listed securities closely and, if necessary, take actions such as issuing additional securities, raising additional capital or undertaking other corporate actions to seek to maintain compliance, any of which could dilute our existing shareholders, increase our costs, or divert management’s attention. The risk of a rapid loss of Nasdaq listing, or an actual delisting, could adversely affect investor confidence, the liquidity and trading price of our Common Stock, and our ability to access the capital markets, and could have a material adverse effect on our business, financial condition and results of operations.
There
can be no assurance that we will be able to continue to maintain compliance with Nasdaq’s continued listing requirements, the Bid
Price Rule, or other Nasdaq listingListing requirements.Rules. If we are not able to comply
with applicable listingNasdaq standards,Listing Rules, our shares of Common
Stock will be subject to delisting.
If
Nasdaq delists our Common Stock from trading on its exchange for failure to meet comply with the Bid Price Rule, or any other listingNasdaq
standards,Listing Rules, we and our stockholders could face significant material adverse consequences including, but not limited to:
During the fiscal year ended December 31, 2025, management identified and began implementing corrective actions to remediate these material weaknesses. These actions include implementing enhanced IT system access controls and data backup procedures, hiring additional accounting personnel to improve segregation of duties, engaging third‑party valuation and technical accounting experts, and initiating the implementation of an enterprise resource planning system designed to automate user roles, permissions, and approval workflows. Management intends to continue these remediation efforts during fiscal year 2026; however, these initiatives may not fully remediate all material weaknesses in our internal control over financial reporting.
The market price and trading volume of our Common Stock has been volatile and may continue to be volatile due to numerous circumstances beyond our control, and stockholders could lose all or part of their investment.
The market price and trading volume of our Common Stock has been and may continue to be highly volatile. Our stock price and trading volume could be subject to wide fluctuations in response to a variety of factors, including, without limitation:
We have a substantial number of convertible securities outstanding and the exercise of our outstanding warrants could have a dilutive effect on our Common Stock.
We have a substantial number of convertible securities outstanding, including warrants exercisable for shares of our Common Stock. The issuance of shares upon the exercise of these warrants would result in dilution to our existing stockholders and could adversely affect the market price of our Common Stock. The trading price of our Common Stock fluctuates and may not be sufficient to induce warrant holders to exercise their warrants. If the warrants are “out of the money,” meaning the exercise price exceeds the market price of our Common Stock, warrant holders are unlikely to exercise their warrants
Our charter documents, Delaware law, and our commercial contracts may contain provisions that may discourage an acquisition of us by others and may prevent attempts by our stockholders to replace or remove our current management.
Provisions in our charter documents, as well as provisions of the Delaware General Corporation Law (“DGCL”), could have an impact on the trading price of our Common Stock by making it more difficult for a third party to acquire us at a price favorable to our stockholders. For example, our charter documents include provisions prohibiting the use of cumulative voting for the election of directors; authorizing the issuance of “blank check” preferred stock, the terms of which may be established and shares of which may be issued by our board of directors without stockholder approval to defend against a takeover attempt; and establishing advance notice requirements for nominations for election to our Board or for proposing matters that can be acted upon at stockholder meetings.
In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our Board or current management. We are subject to Section 203 of the DGCL, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with an interested stockholder for a period of three years following the date on which the stockholder became an interested stockholder, unless such transactions are approved by our Board. This provision could have the effect of delaying or preventing a change of control, whether or not it is desired by or beneficial to our stockholders, which could also affect the price that some investors are willing to pay for our Common Stock.
Finally, commercial contracts that we enter into with our vendors and customers in the course of our business operations may contain provisions with respect to changes in control that could provide for termination rights or otherwise have a negative impact on our business or results of operations if a stockholder were to acquire a significant percentage of our outstanding stock.
WeWhile
the Company has obtained issued patents, we cannot assure you that any patents that will issue, that may issue or that may be licensed
to us will be enforceable or valid or will
not expire prior to the commercialization of our product candidates, thus allowing others
to more effectively compete with us. Therefore,
any patents that we own may not adequately protect our product candidates or our future
products.
Management's Discussion & Analysis (MD&A)
New heading “February 2025 1-for-20 Reverse Stock Split”
New heading “June 2025 1-for-60 Reverse Stock Split”
New heading “Private Placement December 2025”
New heading “Promissory Note”
New heading “Warrant Repurchase”
Removed heading “Research and Development”
Removed heading “Completion of Preclinical Study”
Removed heading “ISO 13485:2016 Certification”
Removed heading “February 2024 Exchange”
Removed heading “April Private Placement”
Removed heading “June 27 Private Placement”
Removed heading “July 18 Private Placement”
Removed heading “July 30 Private Placement”
Removed heading “$10.0 Million Public Offering and Concurrent Private Placement”
Removed heading “Pro Forma Impact of Registered Direct Offerings, Warrant Exchange, and Series A Warrant Revaluation”
Removed heading “Unaudited Pro Forma Balance Sheet”
Removed heading “Going Concern Uncertainty”
Largest changes
“On December 31, 2024, Nasdaq notified us that for at least the last 30 consecutive business days, the bid price for our Common Stock had closed below the minimum $1.00 per share requirement for continued inclusion on the Nasdaq Capital Market pursuant to the Bid Price Rule. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we had a compliance period of 180 calendar days, or until June 30, 2025, to regain compliance with the Bid Price Rule. On February 3, 2025, the Company implemented a reverse stock split at a ratio of 1-for-20 to regain compliance with the Bid Price Rule. …”see in full comparison
“During the year ended December 31, 2024, we received approximately $13,734 through public offerings and debt issuances which were subsequently converted to equity. In addition, subsequent to the balance sheet date, we received $6,349 through the sale of shares of Common Stock. …”see in full comparison
“Pro Forma Impact of Registered Direct Offerings, Warrant Exchange, and Series A Warrant Revaluation”see in full comparison
“Management has considered the significance of such conditions in relation to our ability to meet current obligations and to achieve our business targets and determined that these conditions raise substantial doubt about our ability to continue as a going concern.”see in full comparison
“$10.0 Million Public Offering and Concurrent Private Placement”see in full comparison
Full comparison: every changed paragraph (94)
Unless
otherwise noted, all information in this Item 7 regarding share amounts of our Common Stock and prices per share of our Common Stock
has been adjusted to reflect the application of the one-for-five reverse stock split of our Common Stock that we effected on May 27,
2024 and2024, the one-for-twenty reverse stock split of our Common Stock that we effected on February 3, 2025, and the one-for-sixty reverse
stock split of our Common Stock that we effected on June 13, 2025, as further described below,
on a retroactive basis.
The
Company was incorporated on May 18, 2010 under the laws of the State of Delaware. We are currentlya developingmedical device company focused on the development
of an implantable CBGM,
thecontinuous Glucotrackblood CBGM,glucose monitor (“CBGM”) for persons with Type 1 diabetes and insulin-dependent Type 2 diabetes.diabetes using insulin
or at risk for hypoglycemia (the “Glucotrack CBGM”).
The
Company was founded with a mission to develop Glucotrack®, a non-invasive 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 has since rapidly moved away from
point-in-time point-in-time
measurement to continuous measurement since then,measurement, the Company recentlydetermined determinedin 2023 that it would focus its efforts on developing itsthe
Glucotrack Glucotrack
CBGM. As such, wethe haveCompany sincewithdrew withdrawn ourthe CE Mark for Glucotrack and are no longer pursuing commercialization of this product
or development
of any further iterations.
On October 7, 2022, the Company acquired certain intellectual property related to the Glucotrack CBGM from Paul V. Goode, the Company’s Chief Executive Officer and intends to develop the technology to address the growing Type 1 and Type 2 diabetes market.
The
Company is currently developing the Glucotrack CBGM for use by Type 1 diabetes patients as well as insulin-dependent Type 2 patients.diabetes using insulin or at
risk for hypoglycemia. Implant longevity is key to the success of such a device. We have continued to evolve our sensor chemistry following
our successful in-vitro
feasibility study demonstrating that a minimum two-year implant life is highly probable with the current sensor
design. RecentlySubsequently we announced
that a 3-year longevity is feasible leveraging both in-vitro and in-silico test results. We have also
completed fourmultiple animal studies with evolving
initial prototype systems, all four ofsystems which consistently demonstrated a simple implant procedure,procedure with good functionality,safety and safety. The Companyfunctionality.
has also successfully demonstrated continuous glucose sensing in the epidural space via two additional animal trials, both of which demonstrated
a simple implant procedure, good functionality, and safety. This latter approach is of importance for patients with painful diabetic
neuropathy contemplating spinal cord stimulation therapy for their condition. The results of these animal trialsboth were recentlypresented presented
in poster form at the 2024 American Diabetes Association,Association annual conference. We believe our technology,
if successful, has the Diabetespotential Technologyto Society,be more accurate, more convenient and have a longer duration than other implantable glucose monitors
that are either in the DiabetesMinemarket annualor conferences.currently under development.
Further to the above progress on the Glucotrack CBGM, we have also successfully demonstrated continuous glucose sensing in the epidural space. This latter approach is of importance for patients with diabetes already contemplating spinal cord stimulation therapy for their condition. The Company believes this approach may enable integrated chronic disease management with one system that provides dual benefits of pain relief and glucose monitoring.
The Company completed a first in human study in 2025. This study was an acute study intended to demonstrate device performance and safety, as well as safety of the implant and removal procedures. The study used the planned commercial version of the implantable sensor connected to an externalized prototype electronics device. Patients were monitored in hospital for 4 days. Results of the study were positive, meeting the endpoints of no serious safety events while demonstrating similar performance and accuracy as observed in longer-term animal studies. Initial results were presented in poster form at the 2025 Advanced Technologies & Treatments for Diabetes annual meeting and final results were presented in poster form at the 2025 American Diabetes Association annual conference.
The Company initiated a long-term, multicenter feasibility study in Australia to evaluate the CBGM product performance and safety. The first phase of the clinical study provided early product learnings about how the complexity of certain health conditions may impact study eligibility as well as identified certain product improvements. Following a reassessment of the study in light of planned product updates and anticipated protocol modifications, the Company determined that continuation of the study in its current form was no longer practical and elected to close the study.
Consequently, the Company is expediting discussions with the U.S. Food and Drug Administration (FDA) regarding our planned United States (“U.S.”) clinical trial program that we expect to launch in the 2nd half of 2026, subject to FDA approval of our Investigational Device Exemption (“IDE”) submission expected to be filed in the second quarter of 2026.
The Company initially obtained ISO13485 certification in 2024 and successfully passed the 2025 annual audit, both efforts without any major nonconformities. ISO 13485 is an internationally agreed-upon standard of quality system requirements for the design, production, distribution, and sale of medical devices. Certification of compliance to the standard is recognized and accepted by the FDA, the European Medicines Agency (EMA), and many other regulatory authorities worldwide.
A
regulatory submission has been made for a first in human study outside of the United States. This will be an acute study intended to
demonstrate device performance and safety. All preparatory clinical activities and applicable regulatory approvals are complete. In parallel,
the Company is also preparing for a long-term clinical trial outside the United States that is expected to begin in the second quarter of 2025.
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.
Our
executive management team consists of our Chief Executive Officer and President, Paul V. Goode PhD, an experienced executive with a 25+
year career developing innovative medical technologies, including at Dexcom and MiniMed (now Medtronic Diabetes) and Chief Financial
Officer, Peter C. Wulff, who has over 35 years of experience as a chief financial officer and chief operating officer in both public
and private entities. Our senior management team consists of: Mark Tapsak PhD, Chief Scientific Officer, a medical research scientist
who brings over 25 years of experience in the diabetes industry, including previous senior roles at Dexcom and Medtronic ; James
P. Thrower PhD, Vice President of Advanced Technologies, a seasoned engineering executive with 20 years’ experience formerly of
Sterling Medical Devices, Mindray DS USA and Dexcom; Drinda Benjamin, Vice President of Marketing, a medical device professional
with over 20 years of experience in the medical device and diabetes industry with senior roles at Intuity Medical, Senseonics, Abbott
Diabetes, and Medtronic Diabetes; Vincent Wong, Vice President of Operations, a medical device professional with 15 years of experience
in quality system for implantable medical device manufacturing with senior roles at Cirtec Medical and TOMZ; Sandie Martha, Vice President
Clinical Operations, a medical device professional with over 20 years of experience in the medical device and diabetes industry with
senior roles at Dexcom and GlySens; and Ted Williams, Vice President Regulatory, a medical device professional with over 20 years of
experience in the biotech and diabetes industry with a senior role at GlySens.
Research
and Development
Completion
of Preclinical Study
On
May 16, 2024, we announced that our implantable continuous glucose monitor successfully completed 30 days of a 60-day long-term preclinical
study on measuring glucose in the epidural space. The Glucotrack sensor, implanted in the epidural space of animals, closely tracked
both blood glucose and a commercially available subcutaneous CGM throughout the 30-day period. The implantation procedure took approximately
20 minutes, and the animals recovered without complications. No abnormal clinical signs or findings in the spinal cord or surrounding
tissues were observed at the 30-day mark. On June 13, 2024, we announced that the 60-day long-term study was completed, demonstrating
the feasibility of glucose monitoring in the epidural space. No abnormal clinical signs were observed throughout the study period, and
no abnormal findings were observed in the spinal cord or surrounding tissues during post-explant analysis. The study also confirmed that
the implanted sensor did not cause any delayed latent effects over the long-term period, which is particularly important as a complete
healing process in animal studies with implanted devices may take several weeks. With the completion of this study, the durability of
the epidural approach for continuous glucose monitoring has now been confirmed over the 60-day period. These developments mark another
potential use of the Glucotrack technology by combining the technology with a conventional spinal cord stimulator for treating patients
who have chronic lower back and lower limb pain, a significant proportion of which have diabetes.
On
February 4, 2025, we announced the successful completion of our first in-human clinical study, marking a significant milestone in continuous
glucose monitoring. This study represents the first real-time CBGM placed in the subclavian vein,
offering the potential for direct blood glucose measurement without the limitations often seen with traditional continuous glucose monitors
that measure glucose levels in interstitial fluid.
The
prospective single arm study was a short-term in-hospital study over a period of four days, focusing on the safety and procedural
aspects of the Glucotrack CBGM sensor lead placement, use, and removal. The sensor lead was placed intravascularly via a
percutaneous procedure and connected to a prototype sensor electronics component that was placed on the skin. The six study
participants had been previously diagnosed with diabetes mellitus requiring glucose monitoring and intensive insulin
therapy.
The
results established safety of the placement, usage and removal of the CBGM sensor lead. While neither the study nor prototype system
was designed to evaluate sensor accuracy, the system performed as expected with similar accuracy results as previously seen in our animal
studies.
The
study met its primary endpoint with no procedure or device related serious adverse events reported from implant through seven days post-removal
of the CBGM sensor lead. The study also confirmed the function of the CBGM sensor lead in the subclavian vein. Placement and removal
procedures were successfully performed by interventional cardiologists.
ISO
13485:2016 Certification
On
January 21, 2025, we announced that we received ISO 13485:2016 certification from the British Standards Institute
(“BSI”). We successfully completed Stage I and Stage II Assessments performed by the notified body, BSI, to verify the
Company has established, and is maintaining, a quality management system that meets all requirements of the ISO 13485:2016 standard
for design and development of its products. ISO 13485 is an internationally recognized standard for quality management systems,
created by the International Organization for Standardization to ensure the safety and effectiveness of medical devices. It builds
on the ISO 9001 standard with additional regulatory requirements specific to medical devices. In 2024, the FDA issued the Quality Management System Regulation Final Rule, which harmonizes U.S. requirements with global standards
through the adoption of ISO 13485 for medical devices. ISO 13485 is also strongly recommended and widely used in the European
Union.
On December 31, 2024, Nasdaq notified us that for at least the last 30 consecutive business days, the bid price for our Common Stock had closed below the minimum $1.00 per share requirement for continued inclusion on the Nasdaq Capital Market pursuant to the Bid Price Rule. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we had a compliance period of 180 calendar days, or until June 30, 2025, to regain compliance with the Bid Price Rule. On February 3, 2025, the Company implemented a reverse stock split at a ratio of 1-for-20 to regain compliance with the Bid Price Rule. On April 2, 2025, we received a letter from Nasdaq notifying us that as a result of non-compliance with the Bid Price Rule, Nasdaq Staff had determined to delist our securities. We timely submitted a hearing request to the hearings panel on April 9, 2025, and paid the fee, which resulted in a stay of any suspension or delisting action pending the hearing. The hearing took place on May 13, 2025, and on June 2, 2025, we received the decision of the panel granting us an extension until July 3, 2025, to regain compliance with the Bid Price Rule. On June 13, 2025, the Company implemented a reverse stock split at a ratio of 1-for-60 to regain compliance with the Bid Price Rule.
On July 18, 2025, we received notice from Nasdaq that we had regained compliance with the Bid Price Rule. The Panel retained jurisdiction over the Company through September 29, 2025. On November 5, 2025, the Company was notified by Nasdaq Staff that the Company was in compliance with all Nasdaq Listing Rules.
On
December 31, 2024, we received a notification from Nasdaq that for at least the last 30 consecutive business days, the Company was not
in compliance with the Bid Price Rule and, in accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have a compliance period of 180 calendar
days, or until June 30, 2025, to regain compliance with the Bid Price Rule. If at any time before June 30, 2025, the bid price of our
Common Stock closes at $1.00 per share or more for a minimum of ten consecutive business days, Nasdaq will provide us with a written
confirmation of compliance with the Bid Price Rule and the matter will be deemed closed.
If
we do not regain compliance with the Bid Price Rule by June 30, 2025, we may be eligible for an additional 180-day compliance period.
To qualify, we would be required to meet the continued listing requirement for market value of publicly held shares and all other initial
listing standards for the Nasdaq Capital Market, with the exception of the Bid Price Rule, and would need to provide written notice of
our intention to cure the bid price deficiency during the second compliance period by effecting a reverse stock split, if necessary.
We
filed with the Delaware Secretary of State a Certificate of Amendment (theto “Mayour Certificate of Amendment”), to our
Certificate of Incorporation, as amended (the “Certificate of Incorporation”), which became effective at 4:30
p.m. on
May 17, 2024 (the “First Effective Time”)2024, to implement a one-for-five (1:5) reverse stock split at a ratio of 1-for-5 (the “2024 Reverse
Stock Split”) of the shares
of our Common Stock. The 2024 Reverse Stock Split was approved by our stockholders at the 2024
annual meeting of the stockholders on
April 26, 2024.
2025
Reverse Stock Split
We
filed with the Delaware Secretary of State a Certificate of Amendment to our Certificate of Incorporation (the “2025
Certificate of Amendment”) which became effective at 4:30 p.m. on February 3, 2025 (the “Second Effective Time”),
to implement a reverse stock split at a ratio of 1-for-20 (the “2025 Reverse Stock Split”) of the shares of our Common
Stock. The 2025 Reverse Stock Split was approved by our stockholders at the special meeting of our stockholders held on January 3,
2025 (the “Special Meeting”).
As a result of the 2025 Reverse Stock Split, every twenty (20) shares of issued and outstanding Common Stock were
automatically combined into one (1) issued and outstanding share of Common Stock, without any change in the par value per share. No fractional
shares were issued as a result of the 20254 Reverse Stock Split, and instead, stockholders who otherwise would have been entitled to receive
fractional shares because they held a number of shares not evenly divisible by the Reverse Stock Split ratio were entitled to receive
an additional fraction of a share of Common Stock to round up to the next whole share.
In
addition, the stockholders approved at the Special Meeting an increase in our authorized shares of Common Stock from 100,000,000 to 250,000,000,
as well as the full issuance of shares of Common Stock issuable by us upon the exercise of Series A Warrants and Series B Warrants (further
described below).
2025 Reverse Stock Splits and Increase in Authorized Common Stock
February 2025 1-for-20 Reverse Stock Split
We filed with the Delaware Secretary of State a Certificate of Amendment to our Certificate of Incorporation which became effective at 4:30 p.m. on February 3, 2025, to implement a reverse stock split at a ratio of 1-for-20 (the “February 2025 Reverse Stock Split”) of the shares of our Common Stock. The February 2025 Reverse Stock Split was approved by our stockholders at the special meeting of stockholders held on January 3, 2025 (the “Special Meeting”).
On January 3, 2025, we filed an amendment to our Certificate of Incorporation to increase the Company’s authorized shares of Common Stock from 100,000,000 to 250,000,000. On February 3, 2025, the stockholders approved at the Special Meeting the increase in our authorized shares of Common Stock from 100,000,000 to 250,000,000, as well as the full issuance of shares of Common Stock issuable by us upon the exercise of Series A Warrants and Series B Warrants (defined herein).
June 2025 1-for-60 Reverse Stock Split
We filed with the Delaware Secretary of State a Certificate of Amendment to our Certificate of Incorporation which became effective at 4:30 p.m. on June 13, 2025, to implement a reverse stock split at a ratio of 1-for-60 (the “June 2025 Reverse Stock Split”) of the shares of its Common Stock. The June 2025 Reverse Stock Split was approved by the Company’s stockholders at the 2025 annual meeting of the stockholders held on May 22, 2025.
All shares, options and warrants to purchase shares of Common Stock and loss per share amounts have been adjusted to give retroactive effect to the February and June 2025 reverse share splits, (the “Reverse Stock Splits”) for all periods presented in these interim consolidated financial statements. Any fractional shares resulting from the Reverse Stock Splits were rounded up to the nearest whole share.
On
January 3, 2025, the Company filed an amendment to the Company’s Certificate of Incorporation, as to increase the Company’s
authorized shares of Common Stock from 100,000,000 to 250,000,000.
Financing Activity
All information below is stated in thousands of US dollars (except share data).
February
2024 Exchange
On
February 13, 2024, we entered into the February Exchange Agreement with the February Holders, pursuant to which the Company and the
February Holders agreed to exchange the February
Warrants owned by the February Holders for shares of Common Stock to be issued by the Company.
On
February 13, 2024, the Company closed the February Exchange and issued to the February Holders an aggregate of 35,932 shares of Common Stock in exchange for 43,820 February Warrants.
April
Private Placement
On
April 22, 2024, we entered into a private placement agreement under which the Company issued 3,968 shares of its Common Stock at a price
of $126.0 per share for aggregate gross proceeds of $500,000. The Offering included participation of certain members of the Company’s executive management, Board
of Directors and existing shareholders.
June
27 Private Placement
On
June 27, 2024, we entered into note and warrant purchase agreements with the June 27 Investors, providing for the private placement of unsecured promissory notes in the
aggregate principal amount of $100,000 and to purchase
up to an aggregate of 15,000 shares of Common Stock. The closing occurred on June 27, 2024.
July
18 Private Placement
On
July 18, 2024, we entered into a series of convertible promissory notes with the July 18 Investors, providing for the private placement of unsecured convertible promissory notes in the aggregate
principal amount of $360,000.
On
August 23, 2024, two of the June 27 Investors entered into conversion agreements with the Company, pursuant to which the Company agreed
to convert the principal amount, plus any accrued but unpaid interest, of each of the June 27 Notes, totaling $20,076 each, held by the
investors into Common Stock at a conversion price of $20.40 per share. On September 5, 2024, another June 27 Investor entered into a separate
conversion agreement with the Company, under which the Company agreed to convert
the principal amount, plus any accrued but unpaid interest, of the June 27 Note held by the investor, totaling $259,310, into Common
Stock at the same conversion price of $20.40 per share.
Also
in satisfaction of the debt and pursuant to the August Conversion Agreement, the Company issued to each of the two June 27 Investors
that converted their notes in August, three August 23 Warrants. Each August 23 Warrant becomes
exercisable on August 16, 2025 and has term of 10 years. The August 23 Warrants are exercisable for cash only and have no
price-based antidilution. The first August 23 Warrant is for 535 shares of Common Stock and is exercisable at $37.50 per share. The
second August 23 Warrant is for 382 shares of Common Stock, exercisable at $52.50 per share. The third August 23 Warrant is for 297
shares of Common Stock, exercisable at $67.50 per share. The June 27 Investor that converted his note in September was issued three September 5 Warrants on the same terms as the August 23 Warrants. The first September 5 Warrant is
for 6,915 shares of Common Stock and is exercisable at $37.50 per share. The second September 5 Warrant is for 4,940 shares of
Common Stock, exercisable at $52.50 per share. The third September 5 Warrant is for 3,842 shares of Common Stock, exercisable at
$67.50 per share.
July
30 Private Placement
On
July 30, 2024, we entered into the July 30 Note and three July 30 Warrants with the July 30 Holder, providing for the private placement
of a secured convertible promissory note in the aggregate principal amount of $4,000,000. The July 30
Note bore simple interest at the rate of eight percent (8%) per annum and is due and payable in cash on the earlier of: (a) the twelve
(12) month anniversary of July 30 Note, or (b) the date of closing of a Sale Transaction. The July 30 Note was secured by a first-priority security interest on all Company assets.
$10.0
Million Public Offering and Concurrent Private Placement
On
November 13, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain
purchasers identified on the signature pages therein, pursuant to which the Company sold in a “best efforts” public
offering (the “2024 November Offering”), pursuant to an effective registration statement on Form S-1 (File No. 333-
282158) under the Securities Act, an aggregate of (i) 121,867 shares of its
Common Stock (the “Shares”), (ii) 237,845 pre-funded warrants to purchase up to an aggregate of 237,845 shares of Common
Stock in lieu of Shares (the “Pre-Funded Warrants”), (iii) 359,712 Series A Common Warrants, and (iv) 359,712 Series B
Common Warrants. The public offering price for each Share and accompanying Common Warrants was $27.80, and the public offering price
for each Pre-Funded Warrant and accompanying Common Warrants was $27.78 (the “Offering Price”).
In
a private placement offering completed concurrently with the Offering (the “Concurrent Private Offering”), the July 30
Holder, converted approximately $4,093,112 of debt, which represented the then outstanding principal and accrued interest under a
convertible promissory note dated July 30, 2024 (the “July 30 Note Debt”). The July 30 Note Debt was converted to Common
Stock and Series A Common Warrants and Series B Common Warrants on substantially the same terms as the November 2024 Offering,
resulting in the issuance of 132,036 shares of Common Stock, 132,036 accompanying Series A Common Warrants, and 132,036 accompanying
Series B Common Warrants, based on a conversion price of $31.00 per share, which is equal to the consolidated closing bid price of
the Common Stock on the Nasdaq Capital Market on November 12, 2024.
In
addition, concurrently with the November 2024 Offering, the Company completed the July 18 Note Conversion of the outstanding July 18
Notes. The July 18 Notes, which represented an aggregate outstanding principal and accrued interest in the amount of $304,494 were converted
at a conversion price of $31.20, which is equal to the Floor Price as defined in the July 18 Notes, for an aggregate of 9,760 shares
of Common Stock, 9,760 Series A Common Warrants, and 9,760 Series B Common Warrants.
On
December 17, 2024, we entered into an ATM sales agreement (the “Sales Agreement”) with Dawson James Securities, Inc. (“Dawson
James”), pursuant to which we have agreed to issue and sell shares of Common Stock, having an aggregate offering price of up to $8,230,
$8.23 million, from time to time, through an “at-the-market” equity offering program (the “ATM Program”) under which Dawson
James will act as
sales agent (the “Agent”). As of December 31, 2024, no sales of Common Stock had been made pursuant to the Sales Agreement.
On
March 21, 2025, we sold
12,377,967 206,300 shares of Common Stock at an average offering price of $0.304$18.24 per share pursuant to the Sales Agreement (the “MarchAgreement,
ATM Sale”). We receivedfor net proceeds of approximately $3,643,000,$3,593, after deducting fees owed to the placement agentAgent from such
sale.
What changed in the latest 10-Q
Risk Factors
New heading “Risks Related to the Business Combination and Related Transactions”
New heading “The Merger may not produce the anticipated benefits, and the Company may be unable to successfully integrate the acquired business.”
New heading “The Company may incur additional costs and liabilities arising from the Merger.”
New heading “The Merger Agreement may continue to affect the Company’s operations and capital structure.”
New heading “Risks Related To Lokahi”
New heading “References in this sub-section to the “Company,” “we,” “us,” or “our” refer to Lokahi Therapeutics, Inc., a Nevada corporation.”
New heading “Risks Related to Our Financial Position and Capital Needs”
New heading “We are in the intermediate stages of clinical development for our product candidate LT-100, formerly known as Apitox, which may make it difficult for you to evaluate the success of our business to date and to assess our future viability.”
New heading “We have incurred significant net losses since inception and anticipate that we will continue to incur substantial net losses for the foreseeable future and may never achieve profitability.”
New heading “We will require substantial additional funding to finance our operations. If we are unable to raise additional capital when needed, we could be forced to delay, reduce or terminate certain of our development programs or other operations.”
New heading “The report of our independent registered public accounting firm included a “going concern” explanatory paragraph.”
New heading “Our rights to the LT-100 program derive from a settlement agreement, and any challenge to or failure of performance under that agreement could impair our ability to develop the program.”
New heading “We have identified material weaknesses in our internal control over financial reporting, and the failure to remediate these material weaknesses may adversely affect our business, investor confidence in our parent company, our financial results and the market value of our parent company’s common stock.”
New heading “Risks Related to Our Business and Industry”
New heading “The Company is reliant on its key supplier.”
New heading “If we are unable to successfully develop, receive regulatory approval for, and commercialize our product candidate or future product candidates, our business will be harmed.”
New heading “The FDA regulatory approval process is lengthy and time-consuming and may lead to significant delays in the clinical development and regulatory approval of our product candidate.”
New heading “We may encounter substantial delays in our clinical trials or may not be able to conduct our trials on the timelines we expect.”
New heading “Our programs for which we intend to seek approval as biologics may face competition sooner than anticipated.”
New heading “Because LT-100 represents a novel approach to the treatment of symptoms for knee OA, there are many uncertainties regarding the development, market acceptance, third-party reimbursement coverage and commercial potential of our product candidate.”
New heading “Success in preclinical studies or earlier clinical trials may not be indicative of results in future clinical trials. Our product candidates may not have favorable results in later clinical trials, if any, or receive regulatory approval.”
New heading “Regulatory approval for any approved product is limited by the FDA to those specific indications and conditions for which clinical safety and efficacy have been demonstrated.”
New heading “We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.”
New heading “We may not be successful in identifying and acquiring or in-licensing future product candidates, which could adversely affect our ability to grow our business.”
New heading “If any potential future product candidate is approved and our CMO fails to produce the product in the volumes that we require on a timely basis, or to comply with stringent regulations applicable to pharmaceutical drug manufacturers, we may face delays in the commercialization of this product candidate or be unable to meet market demand and may lose potential revenues.”
New heading “Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay.”
New heading “Our clinical trials may fail to demonstrate substantial evidence of the safety and efficacy of our product candidates, or serious adverse or unacceptable side effects may be identified during the development of our product candidates, which could prevent, delay or limit the scope of regulatory approval of our product candidates, limit their commercialization, increase our costs or necessitate the abandonment or limitation of the development of some of our product candidates.”
New heading “The regulatory approval processes of the FDA and other regulatory authorities are inherently unpredictable. If we are not able to obtain, or experience delays in obtaining, required regulatory approvals, we will not be able to commercialize LT-100 in the United States.”
New heading “All of our current and future products are subject to and will remain subject to substantial regulatory scrutiny even after receiving regulatory approval.”
New heading “Public concern regarding the safety of any of our current or future drug products could delay or limit our ability to obtain regulatory approval, result in the inclusion of unfavorable information in our labeling, or require us to incur additional costs.”
New heading “We face significant competition, and if our competitors develop and market technologies or products more rapidly than we do or that are more effective, safer or less expensive than the product we are commercializing or product candidates we develop, our commercial opportunities will be negatively impacted. Our product candidate will, if approved, also compete with existing branded, generic and off-label products.”
New heading “Even if we obtain regulatory approval of our products, the product may not gain market acceptance among regulators, advisory boards, physicians, patients, third-party payors and others in the medical community.”
New heading “Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential or result in significant negative consequences.”
New heading “Upon completion of Phase III clinical programs, we plan to develop a sales organization, and there is no assurance our marketing and sales organization will be successful.”
New heading “We are highly dependent on our key personnel, and if we are not able to retain these members of our management team or recruit and retain highly qualified personnel, we may not be able to successfully implement our business strategy.”
New heading “If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.”
New heading “Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price.”
New heading “Our business could be adversely affected by the effects of health epidemics in regions where we or third parties on which we rely have significant manufacturing facilities, concentrations of potential clinical trial sites or other business operations. Any future pandemic could materially affect our operations, including at our headquarters in the San Diego area.”
New heading “Our employees, principal investigators, consultants and commercial partners may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading.”
New heading “Risks Related to Our Reliance on Third Parties”
New heading “We rely on our ai² Futures Lab program and collaborations with universities and academic institutions to help identify potential future product candidates, and if these efforts are unsuccessful, our ability to grow our business may be adversely affected.”
New heading “We currently rely on third-party manufacturing and a single-source supplier to supply raw materials and components for, and manufacture, our product candidate. Our inability to have sufficient quantities of our product candidate manufactured, or our failure to comply with applicable regulatory requirements or to supply sufficient quantities at acceptable quality levels or prices, or at all, would materially and adversely affect our business.”
New heading “We rely and will continue to rely on third parties to conduct our preclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval of or commercialize our product candidate.”
New heading “If we or our third-party suppliers use hazardous, non-hazardous, biological or other materials in a manner that causes injury or violates applicable law, we may be liable for damages.”
New heading “We rely on honeybee colonies to supply our active pharmaceutical ingredient, or API, for LT-100, and if these colonies are damaged from pests, disease organisms or other phenomena, it could result in a negative impact on our business.”
New heading “We may form or seek strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such alliances or licensing arrangements.”
New heading “Risks Related to Government Regulation”
New heading “Our relationships with customers, physicians and third-party payors are subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, health information privacy and security laws and other healthcare laws and regulations. If we or our employees, independent contractors, consultants, commercial partners and vendors violate these laws, we could face substantial penalties.”
New heading “Changes in funding for the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new products and services from being developed or commercialized in a timely manner, which could negatively impact our business.”
New heading “We are subject to increasingly stringent and rapidly changing laws and regulations related to privacy and data security. The restrictions and costs imposed by these requirements, or our actual or perceived failure to comply with them, could harm our reputation, subject us to significant fines and liability, and adversely affect our business.”
New heading “If our product candidates are approved for marketing and are found to have been improperly promoted for off-label uses, or if physicians misuse our products or use our products off-label, we may become subject to prohibitions on the sale or marketing of our products, product liability claims and significant fines, penalties and sanctions, and our brand and reputation could be harmed.”
New heading “We are subject to new legislation, regulatory proposals and managed care initiatives that may increase our costs of compliance and adversely affect our ability to market our products, obtain collaborators and raise capital.”
New heading “Any product candidates for which we intend to seek approval as biologic products may face biosimilar competition sooner than anticipated.”
New heading “Our business activities will be subject to the Foreign Corrupt Practices Act, or FCPA, and similar anti-bribery and anti-corruption laws.”
New heading “Risks Related to Our Intellectual Property”
New heading “We rely principally on trade secrets and other forms of non-patent intellectual property protection, which are difficult to protect.”
New heading “Our ability to compete depends in part on our ability to secure and maintain proprietary rights to our products.”
New heading “Our success depends in part on not only our ability, but that of Apimeds Korea’s to protect the intellectual property, including our trade secrets, which can be difficult and costly and is not assured.”
New heading “We do not own the Apitox trademark but may use the trademark pursuant to the terms of the Business Agreement with Apimeds Korea.”
New heading “If our future trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.”
New heading “We may become involved in lawsuits to protect our intellectual property rights, which could be expensive, time consuming and unsuccessful.”
New heading “Any trademarks we may obtain may be infringed or successfully challenged, resulting in harm to our business.”
New heading “Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.”
New heading “We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of their former employers or other third parties.”
Largest changes
“If the Company fails to remediate the material weaknesses or any future deficiencies, or fails to otherwise maintain the adequacy of its internal controls, that could result in a restatement of the Company’s financial statements for prior periods, a decline in the market value of the Company’s common stock, one or more investigations or enforcement actions by state or federal regulatory agencies, stockholder lawsuits, or other adverse actions requiring the Company to incur defense costs or pay fines, settlements, or judgments.”see in full comparison
“It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from government investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. Additionally, we are subject to the risk that a person or government could allege such fraud or other misconduct, even if none occurred. …”see in full comparison
“If our product candidates are approved for marketing and are found to have been improperly promoted for off-label uses, or if physicians misuse our products or use our products off-label, we may become subject to prohibitions on the sale or marketing of our products, product liability claims and significant fines, penalties and sanctions, and our brand and reputation could be harmed.”see in full comparison
“As we expand our business activities outside of the United States, including our clinical trial efforts, we will be subject to the FCPA and similar anti-bribery or anti-corruption laws, regulations or rules of other countries in which we intend to operate. The FCPA generally prohibits offering, promising, giving or authorizing others to give anything of value, either directly or indirectly, to a non-United States government official in order to influence official action, or otherwise obtain or retain business. …”see in full comparison
“Ensuring that our internal operations and business arrangements with third parties comply with applicable healthcare laws and regulations will likely be costly. It is possible that governmental authorities will conclude that our business practices, including our relationships with physicians and other healthcare providers, some of whom are compensated in the form of stock options for consulting services provided, may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. …”see in full comparison
“Any current or future CMOs we engage must comply with strictly enforced federal, state and foreign regulations, including cGMP requirements enforced by the FDA through its establishment inspection program. Despite the existence of CMO agreements and shared cGMP responsibilities our contract CMO may ignore these contractual provisions, or otherwise fail to meet the minimum standards set forth in the cGMP regulations, resulting in manufacturing non-compliance. This may go unnoticed or uncorrected despite our best efforts to regulatory audit or confirm the CMOs regulatory responsibilities. …”see in full comparison
Full comparison: every changed paragraph (197)
On
May 11, 2026, we received athe Staff Determination letter (the “Staff Determination”) from the Listing Qualifications Department
of Nasdaq notifying us that Nasdaq staff (the “Nasdaq
Staff”) has determined to delist our Common Stock from Thethe Nasdaq Capital
Market.
The
Staff Determination stated that the bid price of the Common Stock had closed at less than $1.00 per share over the previous 30 consecutive
business days, from March 27, 2026 through May 8, 2026, and that, as a result, we are not in compliance with Nasdaq Listing Rule 5550(a)(2),
which requires listed securities to maintain a minimum bid price of $1.00 per share (the “Bid Price Rule”).Rule.
The
Staff Determination further stated that, although companies are typically afforded a 180-calendar day period to regain compliance with
the Bid Price Rule, the Company is not eligible for any such compliance period pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(iv). Nasdaq
Staff cited the fact that we have effected a reverse stock split over the prior one-year period and have effected one or more reverse
stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one. Accordingly, unless we request
an appeal by May 18, 2026, our Common Stock will be scheduled for delisting and suspended at the opening of business on May 20, 2026.
We
intend to timely requestrequested a hearing before a Nasdaq Hearingsthe Panel (the “Panel”) to appeal Nasdaq Staff’s
determination. Adetermination timelyand such hearing request will staystayed any further
delisting actions through the hearing process. At the hearing,hearing on June 18, 2026, we
expect to presentpresented our plan to regain compliance with the Bid
Price Rule.Rule and the Minimum Stockholders’ Equity Requirement (as discussed below). We intend to continue to monitor the closing
bid price of
our Common Stock and will consider available options to regain compliance with the Bid Price Rule, including potentially
implementing a reverse stock split (if approved by our stockholders). There can be no assurance that we will be successful in our
appeal, that the Panel will grant our request for continued listing, or that we will be able to regain compliance with the Bid Price
Rule or maintain compliance with other applicable Nasdaq listing requirements.
On May 15, 2026, we received a second letter from Nasdaq notifying us that our Form 10-Q for the period ended March 31, 2026, indicates that we no longer meet the $2,500,000 minimum stockholders’ equity requirement for continued listing set forth under Listing Rule 5550(b)(1) (the “Minimum Stockholders’ Equity Requirement”), and we do not meet the alternatives of market value of listed securities or net income from continuing operations. Accordingly, the failure to comply with the Minimum Stockholders’ Equity Requirement has become an additional basis for delisting. The Nasdaq Staff further notified us that failure to meet the Minimum Stockholders’ Equity Requirement will be considered in its decision regarding our continued listing on the Nasdaq Capital Market. We presented our views with respect to this additional deficiency to the Panel at the hearing on June 18, 2026. On July 30, 2026, we received an additional Staff Determination from Nasdaq confirming that our Business Combination with Lokahi will constitute a business combination that results in a “Change of Control” pursuant to Listing Rule 5110(a). Accordingly, the post-transaction entity will be required to satisfy all of Nasdaq’s initial listing criteria and complete Nasdaq’s initial listing process prior to the conversion of the Preferred Stock issued in connection with the Business Combination. There can be no assurance that we will be successful in our appeal, that the Panel will grant our request for continued listing, that our initial listing application will be approved, or that we will be able to regain compliance with the Bid Price Rule, Minimum Stockholders’ Equity Requirement, or maintain compliance with any applicable Nasdaq listing requirements.
In
addition to the foregoing requirements, Nasdaq has recently proposed a new listing requirement that would require each Nasdaq listed
issuer to maintain a minimum market value of listed securities (“MVLS”) of at least $5 million. Under this proposal, if the
value of an issuer’s
listed securities, as measured by each applicable trading day’s closing price, continues to be less
than $5 million for a period
of 30 consecutive business days, Nasdaq will issue a staff delisting determination and immediately suspend
trading days,of the issuer’s securities would immediately be delisted,securities, with no compliance or cure period. TheA proposedrequest for a hearing before the Nasdaq Hearings Panel
ruledoes wouldnot also preclude an issuer’s ability to seekautomatically stay the suspension of delistingtrading. duringThe anyHearings appealsPanel process,may andreverse woulda precludedetermination if it concludes Nasdaq hearings
panels from reversing the delisting determination to situations where there wasmade an
error andor, thein companylimited never actually failed to satisfy
the requirement. The panel would also not be able to consider any facts indicating that issuer subsequently regained compliance with
the requirement orcircumstances, grant an issuerexception anyof additional timeup to regain180 compliance.days Thefor proposeda rule is subjectcompany to reviewdemonstrate andcompliance approvalwith byNasdaq’s
initial listing standards, which are generally more stringent than the
SEC, andcontinued itlisting isstandards. unknownOn whetherJuly 22, 2026, the SEC willapproved
this approverule. On July 29, 2026, the proposal.MVLS Ifrule approvedwas automatically stayed pending review by the SEC,SEC. It is not certain whether or when the
MVLS rule couldwill becomeretake effective on an imminent
basis.effect. Our Common Stock currently trades at levels that are below the $5 million aggregate market value threshold proposed by Nasdaq.threshold.
As such, if this proposal is approved by the SEC,MVLS rule retakes effect, our Common Stock could be imminently delisted by Nasdaq on this basis.
Risks Related to the Business Combination and Related Transactions
The Merger may not produce the anticipated benefits, and the Company may be unable to successfully integrate the acquired business.
Although the Merger has been completed, the Company may not realize the anticipated benefits of the Merger, including expected synergies, growth opportunities, or cost savings. The Company’s ability to achieve these benefits depends on a number of factors, including the successful integration of the Lokahi business, which may be more difficult, time-consuming or costly than expected.
The Company may incur additional costs and liabilities arising from the Merger.
Following the closing of the Merger, the Company may continue to incur significant costs related to integration, restructuring, professional fees, and other transaction-related expenses. In addition, the Company may be subject to liabilities arising from the Lokahi business that were not known or fully quantified at the time the Merger Agreement was entered into.
The Merger Agreement may continue to affect the Company’s operations and capital structure.
Certain provisions of the Merger Agreement, including those governing the issuance of the Merger Consideration in connection with the Business Combination, continue to apply following the closing of the Merger and may limit the Company’s flexibility with respect to capital structure, financings, or other corporate actions.
Risks Related To Lokahi
References in this sub-section to the “Company,” “we,” “us,” or “our” refer to Lokahi Therapeutics, Inc., a Nevada corporation.
Risks Related to Our Financial Position and Capital Needs
We are in the intermediate stages of clinical development for our product candidate LT-100, formerly known as Apitox, which may make it difficult for you to evaluate the success of our business to date and to assess our future viability.
We are a clinical stage biopharmaceutical company in the process of developing LT-100, an intradermally administered bee venom-based toxin. Our focus is primarily on developing innovative therapies that address inflammation and pain management symptoms associated with knee osteoarthritis (OA) and, to a lesser extent, multiple sclerosis (MS). LT-100 is currently marketed and sold by Apimeds Inc. (“Apimeds Korea”) in South Korea as “Apitoxin” for the treatment of OA. Lokahi is not associated with the market, sale and revenues generated from Apitoxin in South Korea, and LT-100 has not yet been approved by the FDA for any indication. On August 2, 2021, we entered into a Business Agreement with Apimeds Inc. (“Apimeds Korea”), pursuant to which Apimeds Korea granted us a sublicensable, royalty-bearing license to utilize all prior clinical development data associated with LT-100, and to advance clinical research, develop, manufacture, commercialize and sell LT-100 in the United States (the “Business Agreement”).
To date, we have devoted substantially all of our resources to performing research and development, undertaking preclinical and clinical studies and enabling manufacturing activities in support of our product development efforts, hiring personnel, acquiring and developing our technology, performing business planning, establishing our intellectual property portfolio and raising capital to support and expand such activities. As an organization, we have not yet demonstrated an ability to conduct sales and marketing activities necessary for successful commercialization or arrange for a third party to conduct these activities on our behalf. Consequently, any predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history.
Our current portfolio includes one product candidate, and we do not expect to generate revenue from our product candidate in the near future. We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives, including with respect to our clinical candidate. We are transitioning from an early stage research and development company to a late stage development company, with a focus on delivering Phase III clinical data establishing LT-100 as a viable commercial candidate. We may not be successful in this transition.
We have incurred significant net losses since inception and anticipate that we will continue to incur substantial net losses for the foreseeable future and may never achieve profitability.
We are a clinical stage biopharmaceutical company that was formed on December 1, 2025. Investment in clinical stage companies is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidates will not gain regulatory approval or become commercially viable. We have not generated any revenue from product sales. As a result, we are not profitable and have incurred losses in each year since inception. Our net losses were $5,889,447 and $8,098,087 for the three and six months ended June 30, 2026, respectively, compared to $2,639,139 and $3,041,536 for the corresponding prior-year periods. Because we were formed on December 1, 2025, the financial information presented in these risk factors has been prepared on a standalone carve-out basis, derived from the historical financial records of our former parent Apimeds Pharmaceuticals US, Inc. (“Apimeds US”) The prior-year comparative amounts reflect periods during which we did not operate as a separate company, and include allocations of costs that may not be indicative of the results we would have achieved had we operated on a standalone basis, or of our future results. As of June 30, 2026, we had an accumulated deficit of $8,805,260 and a total stockholders’ deficit of $6,740,718.
We expect to continue to spend significant resources to fund research and development of, and seek regulatory approvals for, our product candidate. We expect to incur substantial and increasing operating losses over the next several years. As a result, our accumulated deficit will also increase significantly. We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital. We may never be profitable and, if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.
We will require substantial additional funding to finance our operations. If we are unable to raise additional capital when needed, we could be forced to delay, reduce or terminate certain of our development programs or other operations.
As of June 30, 2026, we had cash and cash equivalents of $53,186, total current assets of $2,289,183 against total current liabilities of $9,136,120, resulting in a working capital deficit of $6,846,937. Net cash used in operating activities was $3,624,474 for the six months ended June 30, 2026. These conditions raise substantial doubt about our ability to continue as a going concern for at least twelve months from the date of this filing, and we will require substantial additional capital to fund our current operating plans. However, our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned. We expect to finance our cash needs through public or private equity or debt financings, third-party (including government) funding and marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements or any combination of these approaches. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide, including the trading price of our parent company’s common stock. Our future capital requirements will depend on many factors, including:
Our ability to raise additional funds will depend on financial, economic and other factors, many of which are beyond our control. We cannot be certain that additional funding will be available on acceptable terms, or at all. We have no committed source of additional capital and if we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development of our product candidate or other research and development initiatives. Our license agreements may also be terminated if we are unable to meet the payment obligations or milestones under the agreements. We could be required to seek collaborators for our product candidate at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available or relinquish or license on unfavorable terms our rights to our products in markets where we otherwise would seek to pursue development ourselves.
The report of our independent registered public accounting firm included a “going concern” explanatory paragraph.
The report of our independent registered public accounting firm on our financial statements for the period from January 1, 2025, through December 31, 2025 on a standalone basis included an explanatory paragraph indicating that there was substantial doubt about our ability to continue as a going concern. If we are unable to raise additional capital as and when needed, our business, financial condition and results of operations will be materially and adversely affected, and we may be forced to delay our development efforts, limit our activities and reduce research and development costs.
If we are unable to continue as a going concern, we may have to liquidate our assets, and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements. The inclusion of a going concern explanatory paragraph by our independent registered public accounting firm, our lack of cash resources and our potential inability to continue as a going concern may materially adversely affect our parent company’s share price and our ability to raise new capital, enter into licensing and collaboration arrangements or other contractual relationships with third parties and otherwise execute our development strategy.
Our rights to the LT-100 program derive from a settlement agreement, and any challenge to or failure of performance under that agreement could impair our ability to develop the program.
Our rights to the LT-100 program were acquired pursuant to a Confidential Settlement and Mutual Release Agreement entered into in April 2026 among Apimeds US, MindWave Innovations Inc., us, Erik Emerson, Inscobee Inc. and Apimeds Inc., which resolved disputes arising from the December 1, 2025 merger between Apimeds US and MindWave. Under the settlement we secured the rights relating to the LT-100 program, including the associated intellectual property, regulatory materials, development data and manufacturing information. As consideration, we delivered $3 million in cash and assumed certain liabilities of Apimeds US. The assumed liabilities may prove greater than we currently estimate and satisfying them will consume cash that would otherwise be available to fund development of LT-100. Our ability to develop and commercialize LT-100 also depends on the continued effectiveness of the settlement and on the parties’ performance of their remaining obligations under it. If the settlement were challenged, rescinded or found unenforceable in whole or in part, if any party failed to perform, or if new disputes arose among the parties concerning the scope of the transferred rights or the liabilities we assumed, we could lose or have impaired our rights to some or all of the LT-100 program assets, incur substantial legal costs and management distraction, and be delayed in or prevented from advancing the program. We also remain dependent on Apimeds Korea under the Business Agreement for the licensed “Apitox” name and related rights, and the settlement does not eliminate the risks described elsewhere in these risk factors relating to that relationship.
We have identified material weaknesses in our internal control over financial reporting, and the failure to remediate these material weaknesses may adversely affect our business, investor confidence in our parent company, our financial results and the market value of our parent company’s common stock.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management identified a material weakness in our internal control over financial reporting. Specifically, the Company does not currently have sufficiently documented procedures or control activities in place to support a reliable financial reporting process. This includes an absence of controls over the review and approval of journal entries, segregation of duties, reconciliations, and other fundamental accounting processes.
The material weakness did not result in any material misstatements to the Company’s financial statements, and management has concluded that the Company’s financial statements and other financial information included in its Quarterly Report fairly and accurately present the Company’s financial condition, results of operations, and cash flows for the periods in accordance with GAAP.
We have begun exploring remedial efforts to address the underlying causes of the material weaknesses. There can be no assurance that any remedial efforts we take, if any, will be sufficient to remediate the control deficiencies that led to our material weaknesses in our internal controls over financial reporting or prevent future material weaknesses or control deficiencies from occurring.
If the Company fails to remediate the material weaknesses or any future deficiencies, or fails to otherwise maintain the adequacy of its internal controls, that could result in a restatement of the Company’s financial statements for prior periods, a decline in the market value of the Company’s common stock, one or more investigations or enforcement actions by state or federal regulatory agencies, stockholder lawsuits, or other adverse actions requiring the Company to incur defense costs or pay fines, settlements, or judgments.
Risks Related to Our Business and Industry
The Company is reliant on its key supplier.
We contract directly with a United States company for the supply of dried bee venom and have exclusivity in the field of pharmaceutical use. The exclusivity exception is for sales of bee venom to Apimeds Korea for use outside the United States. The agreement may be terminated upon mutual written consent of both parties. Termination of this agreement, variations in their terms or the failure of our key supplier to comply with its obligations under its agreement (including if our key supplier were to become insolvent) could have a material adverse effect on the Company’s consolidated financial results and on your investment.
If we are unable to successfully develop, receive regulatory approval for, and commercialize our product candidate or future product candidates, our business will be harmed.
Our product candidate remains in clinical development, and we have not yet completed a pivotal trial. The FDA permitted our investigational new drug application for LT-100 to proceed in 2014, and we began enrolling subjects. In May 2026, we held a Type C meeting with the FDA’s Division of Anesthesiology, Addiction Medicine and Pain Medicine to discuss the proposed development pathway for LT-100. We are evaluating whether the historical administration approach requiring up to 15 intradermal injections per treatment visit can be simplified to a single subcutaneous injection per visit, and we have completed a nonclinical minipig study comparing systemic exposure following subcutaneous and intradermal administration. There is no assurance that the FDA will accept a modified administration approach, or that a single-injection presentation will prove safe or effective. Our product candidate will require additional preclinical and/or clinical development, regulatory approval, obtaining manufacturing supply, capacity, and expertise, building a commercial organization or successfully outsourcing commercialization, substantial investment, and significant marketing efforts, before we generate any revenue from product sales. We do not have any products that are approved for commercial sale, and we may never be able to develop or commercialize marketable products.
Our ability to generate revenue from our product candidate, which we do not expect will occur for several years, if ever, will depend heavily on the successful development, regulatory approval, and eventual commercialization of our product candidate. The success of our product candidate or any other product candidates that we develop or otherwise may acquire will depend on several factors, including:
If we do not succeed with respect to one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize the product candidate we develop, which would materially harm our business. If we do not receive marketing approvals for any product candidate we develop, we may not be able to continue our operations. Even if regulatory approvals are obtained, we could experience significant delays or an inability to successfully commercialize our current and any future product candidates we develop, which would materially harm our business. If we are not able to generate sufficient revenue through the sale of any current or future product candidate, we may not be able to continue our business operations or achieve profitability.
The FDA regulatory approval process is lengthy and time-consuming and may lead to significant delays in the clinical development and regulatory approval of our product candidate.
The time required to obtain approval from the FDA is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of FDA. Any delay in obtaining FDA and/or other necessary regulatory approvals in the United States for any investigational new drug and failure to receive such approvals would have an adverse effect on the investigational new drug’s potential commercial success and on our business, prospects, financial condition, and results of operations.
We have not obtained regulatory approval for any product candidate. We have not previously submitted a Biologic License Application (“BLA”) to the FDA. It is possible that none of our current or future product candidates will ever obtain regulatory approval from the FDA. The novel nature of our product candidate may create further challenges in obtaining regulatory approval. The regulatory approval pathway for our product candidate may be uncertain, complex, expensive, and lengthy, and approval may not be obtained. In addition, factors outside our control, such as government shutdowns, natural disasters, and public health emergencies, could disrupt business at the FDA, which could result in delays of reviews, approvals and communications with FDA related to our clinical trials and product candidates.
Our current and future product candidate could fail to receive regulatory approval for many reasons, including the following:
The lengthy approval process as well as the unpredictability of clinical trial results may result in our failing to obtain regulatory approval to market any product candidate we develop, which would significantly harm our business, results of operations and prospects. FDA has substantial discretion in the approval process and in determining when or whether regulatory approval will be granted for any product candidate that we develop. Even if we believe the data collected from current or future clinical trials of our product candidate are promising, such data may not be sufficient to support approval by FDA.
Even if we obtain approval, FDA may approve any of our product candidate for fewer or more limited indications, or a more limited patient population, than we request; may grant approval contingent on the performance of costly post-approval clinical trials or other post-marketing requirements; or may approve a product candidate with labeling that does not include the claims we believe are necessary or desirable for the successful commercialization of such product candidates. Moreover, if we modify LT-100, we may have to either file a supplemental BLA with FDA or receive FDA approval for a comparability protocol or obtain other regulatory approval. These requirements may be costly and time-consuming, and FDA ultimately may not approve of such changes.
FDA may also change its policies, promulgate additional regulations, revise existing regulations, or take other actions that may prevent or delay approval of our future products under development on a timely basis. Such policy or regulatory changes could impose additional requirements upon us that could delay our ability to obtain approvals, increase the costs of compliance or restrict our ability to maintain any marketing authorizations we may have obtained.
We may encounter substantial delays in our clinical trials or may not be able to conduct our trials on the timelines we expect.
Clinical testing is expensive, time consuming and subject to uncertainty. We cannot guarantee that any clinical studies will be conducted as planned or completed on schedule, if at all. Even if these trials begin as planned, issues may arise that could suspend or terminate such clinical trials. A failure of one or more clinical studies can occur at any stage of testing, and our future clinical studies may not be successful. Events that may prevent successful or timely completion of clinical development include:
Any inability to successfully complete preclinical and clinical development could result in additional costs to us or impair our ability to generate revenue. In addition, if we make manufacturing or formulation changes, we may be required to or we may elect to conduct additional studies to bridge our modified products to earlier versions. Clinical trial delays could also shorten any periods during which our products have patent protection and may allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our products and may harm our business and results of operations.
Our programs for which we intend to seek approval as biologics may face competition sooner than anticipated.
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (the “ACA”), includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product. Under the BPCIA, an application for a highly similar or “biosimilar” product may not be submitted to the FDA until four years following the date that the reference product was first approved by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first approved. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product.
We believe that any of our programs approved as biologics under a BLA should qualify for the 12-year period of exclusivity. However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider our programs to be reference products for competing products, potentially creating the opportunity for competition sooner than anticipated. Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation. Moreover, the extent to which a biosimilar, once approved, will be substituted for any reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.
Because LT-100 represents a novel approach to the treatment of symptoms for knee OA, there are many uncertainties regarding the development, market acceptance, third-party reimbursement coverage and commercial potential of our product candidate.
Because our candidate represents a novel approach to the treatment of the inflammation and pain management symptoms associated with knee OA, there are many uncertainties related to the development, marketing, reimbursement and the commercial potential for LT-100. There can be no assurance as to the length of the clinical trials, the number of patients the FDA will required to be enrolled in the trials in order to establish the safety, efficacy, purity and potency of antibody products or that the design of or data generated in these trials will be acceptable to the FDA to support marketing approval.
In addition, the FDA may take longer than usual to come to a decision on any BLA that we submit and may ultimately determine that there is insufficient data, information or experience with our product candidates to support an approval decision. The FDA may also require that we conduct additional post-marketing studies or implement risk management programs, such as risk evaluation and mitigation strategies until more experience with our product candidate is obtained. Finally, after increased usage, we may find that our product candidate does not have the intended effect or have unanticipated side effects, potentially jeopardizing initial or continuing regulatory approval and commercial prospects.
Success in preclinical studies or earlier clinical trials may not be indicative of results in future clinical trials. Our product candidates may not have favorable results in later clinical trials, if any, or receive regulatory approval.
Management's Discussion & Analysis (MD&A)
New heading “Business Combination”
New heading “2025 Reverse Stock Splits and Increase in Authorized Common Stock”
New heading “6B ELOC Financing”
New heading “Consolidated Results of Operations for the Six Months ended June 30, 2026 and 2025”
New heading “Research and development expenses”
New heading “General and administrative expenses”
New heading “Change in derivative liability”
New heading “Other (income) expense, net”
Removed heading “2025 Reverse Stock Split and Increase in Authorized Common Stock”
Removed heading “Resignation of Peter C. Wulff as Chief Financial Officer”
Largest changes
“Consolidated Results of Operations for the Six Months ended June 30, 2026 and 2025”see in full comparison
“2025 Reverse Stock Split and Increase in Authorized Common Stock”see in full comparison
Full comparison: every changed paragraph (54)
The Company was incorporated on May 18, 2010 under the laws of the State of Delaware. The Company is a holding company with two operating subsidiaries: (1) Lokahi Therapeutics, Inc., a Nevada corporation (“Lokahi”), a clinical stage biopharmaceutical company focused on developing innovative therapies for inflammation and pain management, including LT-100, an intradermally administered bee venom-based toxin for knee osteoarthritis and multiple sclerosis; and (2) Glucotrack Technologies Inc., a Nevada corporation (“Glucotrack Technologies”), a medical device company focused on the development of an implantable continuous blood glucose monitor (“CBGM”) for persons with Type 1 diabetes and Type 2 diabetes using insulin or at risk for hypoglycemia (the “Glucotrack CBGM”).
Lokahi Therapeutics Inc.
Lokahi is a clinical stage biopharmaceutical company developing LT-100, an intradermally administered bee venom-based toxin. Lokahi’s primary focus is on developing innovative therapies addressing inflammation and pain management symptoms associated with knee osteoarthritis and, to a lesser extent, multiple sclerosis. LT-100 is currently marketed and sold by Apimeds Inc. in South Korea as “Apitoxin” for the treatment of osteoarthritis; however, Lokahi is not associated with the market, sale, or revenues generated from Apitoxin in South Korea, and LT-100 has not yet been approved by the FDA for any indication. Lokahi has also established the ai² platform to support business development, opportunity evaluation, and talent development activities, which is used to identify and assess therapeutic, biotechnology, medical device, and other healthcare-related opportunities for potential acquisition, licensing, strategic partnership, or development.
Glucotrack Technologies Inc.
TheGlucotrack
CompanyTechnologies was founded with a mission to develop Glucotrack®, a non-invasive glucose monitoring device designed to help people
with 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 has since rapidly moved away from
point-in-time measurement to continuous measurement, theGlucotrack CompanyTechnologies determined in 2023 that it would focus its efforts on developing
the the
Glucotrack CBGM. As such, theGlucotrack CompanyTechnologies withdrew the CE Mark for Glucotrack and is no longer pursuing commercialization
of this product
or development of any further iterations.
On
October 7, 2022, theGlucotrack CompanyTechnologies acquired certain intellectual property related to the Glucotrack CBGM from Paul V. Goode, theGlucotrack
Technologies’ Company’s
Chief Executive Officer and intends to develop the technology to address the growing Type 1 and Type 2 diabetes market.
TheGlucotrack
CompanyTechnologies is currently developing the Glucotrack CBGM for use by Type 1 diabetes patients as well as Type 2 diabetes patients using
insulin insulin
or at risk for hypoglycemia. Implant longevity is key to the success of such a device. TheGlucotrack CompanyTechnologies has demonstrated
that a 3-year longevity
is feasible leveraging both in-vitro and in-silico test results. TheGlucotrack CompanyTechnologies has also completed multiple
animal studies with initial
prototype systems which demonstrated a simple implant procedure with good safety and functionality. The results
of both were presented
in poster form at the 2024 American Diabetes Association annual conference. DuringIn the period,2024, two peer-reviewed scientific
articles articles
were published related to the CBGM technology. One article, published in the IEEE Sensors Journal, characterized the long-term
in-vitro in-vitro
stability of electrochemical glucose sensors of the type used in the CBGM system, including the first year-long measurements
of glucose
oxidase enzyme decay reported in the literature. A second peer-reviewed article, published in The Journal of Diabetes Research,
evaluated evaluated
the long-term accuracy and stability of the CBGM system in an in-vivo ovine model, providing externally validated evidence
supporting supporting
the long-term performance of the technology. TheGlucotrack CompanyTechnologies believes its 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.
Further
to the above progress on the Glucotrack CBGM, theGlucotrack CompanyTechnologies has also successfully demonstrated continuous glucose sensing in
the epidural
space. This latter approach is of importance for patients with diabetes already contemplating spinal cord stimulation therapy
for their
condition. TheGlucotrack CompanyTechnologies believes this approach may enable integrated chronic disease management with one system
that provides dual benefits
of pain relief and glucose monitoring.
TheGlucotrack
CompanyTechnologies completed a first in human study in 2025. This study was an acute study intended to demonstrate device performance and safety,
as well as safety of the implant and removal procedures. The study used the planned commercial version of the implantable sensor connected
to an externalized prototype electronics device. Patients were monitored in hospital for 4 days. Results of the study were positive,
meeting the endpoints of no serious safety events while demonstrating similar performance and accuracy as observed in longer-term animal
studies. Initial results were presented in poster form at the 2025 Advanced Technologies & Treatments for Diabetes annual meeting
and final results were presented in poster form at the 2025 American Diabetes Association annual conference.
TheGlucotrack
CompanyTechnologies initiated a long-term, multicenter feasibility study in Australia to evaluate the CBGM product performance and safety. The
first first
phase of the clinical study provided early product learnings about how the complexity of certain health conditions may impact study
eligibility eligibility
as well as identified certain product improvements. Following a reassessment of the study in light of planned product updates
and anticipated
protocol modifications, theGlucotrack CompanyTechnologies determined that continuation of the study in its current form was no
longer practical and elected
to close the study.
SubsequentGlucotrack
to March 31, 2026, the CompanyTechnologies submitted an Investigational Device Exemption (“IDE”) application to the U.S. Food and Drug Administration
Administration (“FDA”) in May 2026 to initiate a U.S. clinical study of its CBGM technology. The IDE submission represents an important
milestone for theGlucotrack CompanyTechnologies and reflects progress in its preclinical development and underlying technical foundation.
Glucotrack The CompanyTechnologies has also
engaged a clinical research organization and identified the trial sitessite in preparation for study
commencement.
TheGlucotrack
CompanyTechnologies initially obtained ISO13485 certification in 2024 and successfully passed the 2025 annual audit, both efforts without any
major major
nonconformities. ISO 13485 is an internationally agreed-upon standard of quality system requirements for the design, production,
distribution, distribution,
and sale of medical devices. Certification of compliance to the standard is recognized and accepted by the FDA, the European
Medicines Medicines
Agency (EMA), and many other regulatory authorities worldwide.
Business Combination
On July 14, 2026 (the “Closing Date”), we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Glucotrack Merger Sub, Inc., a Nevada corporation (“Merger Sub”), Lokahi Therapeutics, Inc., a Nevada corporation (“Lokahi”), Glucotrack Technologies Inc. (“Glucotrack Technologies”), and Paul V. Goode, solely in his capacity as representative for Glucotrack Technologies (the “Glucotrack Technologies Representative”). The transactions contemplated by the Merger Agreement are referred to herein as the “Business Combination” and the closing of the Business Combination is referred to herein as the “Closing”. Immediately prior to the Closing, articles of merger (the “Articles of Merger”) were filed with the Secretary of State of the State of Nevada. Pursuant to the Articles of Merger, Merger Sub merged with and into Lokahi (the “Merger”), with Lokahi surviving as a direct wholly owned subsidiary of the Company. The Closing occurred simultaneously with the execution and delivery of the Merger Agreement on the Closing Date. For additional information regarding the Business Combination, see Note 5, “Subsequent Events,” in this Quarterly Report on Form 10-Q.
2025
Reverse Stock Split and Increase in Authorized Common Stock
We
filed with the Delaware Secretary of State a Certificate of Amendment to its Certificate of Incorporation which became effective at 4:30
p.m. on February 3, 2025, to implement a reverse stock split at a ratio of 1-for-20 (the “2025 Reverse Stock Split”) of the
shares of our Common Stock. The 2025 Reverse Stock Split was approved by our stockholders at the special meeting of stockholders held
on January 3, 2025 (the “Special Meeting”). All shares and per share numbers in the consolidated financial statements have
been retroactively adjusted and are reflected on a post-reverse share split basis.
On
February 3, 2025, the stockholders approved at the Special Meeting the increase in our authorized shares of Common Stock from 100,000,000
to 250,000,000, as well as the full issuance of shares of Common Stock issuable by us upon the exercise of Series A Warrants and Series
B Warrants (defined herein). On January 3, 2025, we filed an amendment to our Certificate of Incorporation, as to increase the Company’s
authorized shares of Common Stock from 100,000,000 to 250,000,000.
ELOC
Bridge Financing
On July 14, 2026, in connection with the Business Combination, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors (the “Bridge Investors”), pursuant to which the Company issued senior secured convertible promissory notes (the “Bridge Notes”) and common stock purchase warrants (the “Bridge Warrants”) for gross proceeds of approximately $4,450 (the “Bridge Financing”). The Bridge Notes include an original issue discount of 22%, bear interest at a rate of 8% per annum, and mature nine months from the date of issuance. The Bridge Notes and Bridge Warrants are secured by a first priority security interest in all assets of the Company and its subsidiaries (excluding the Glucotrack Technologies Assets). On August 4, 2026, the Company closed a follow-on investment in the Bridge Financing (the “Bridge Follow-On”) with additional investors who joined the Purchase Agreement and the Security Agreement and invested aggregate gross proceeds of $3,500 in exchange for senior secured convertible promissory notes in the aggregate principal amount of approximately $4,487 (reflecting a 22% original issue discount) and common stock purchase warrants, in each case on substantially identical terms to the Bridge Notes and Bridge Warrants. Approximately $3,081 of the proceeds was used to pay off the Bridge Notes issued to the original investors on July 14, 2026. For additional information regarding the Bridge Financing and the Bridge Follow-On, see Note 5, “Subsequent Events,” in this Quarterly Report on Form 10-Q.
Interim PIPE
On August 4, 2026, the Company entered into a Securities Purchase Agreement (the “Interim PIPE SPA”) with an investor for a private placement of securities (the “Interim PIPE”). At the closing, the Company issued 2,666,667 pre-funded warrants to purchase shares of Common Stock and common stock purchase warrants to purchase 2,666,667 shares of Common Stock, for aggregate gross proceeds to the Company of $2,000. For additional information regarding the Interim PIPE, see Note 5, “Subsequent Events,” in this Quarterly Report on Form 10-Q.
2025 Reverse Stock Splits and Increase in Authorized Common Stock
February 2025 1-for-20 Reverse Stock Split
We filed with the Delaware Secretary of State a Certificate of Amendment to its Certificate of Incorporation which became effective at 4:30 p.m. on February 3, 2025, to implement a reverse stock split at a ratio of 1-for-20 (the “February 2025 Reverse Stock Split”) of the shares of our Common Stock. The February 2025 Reverse Stock Split was approved by our stockholders at the special meeting of stockholders held on January 3, 2025 (the “Special Meeting”).
On January 3, 2025, the stockholders approved at the Special Meeting the increase in our authorized shares of Common Stock from 100,000,000 to 250,000,000, as well as the full issuance of shares of Common Stock issuable by us upon the exercise of Series A Warrants (defined below) and the cashless exchange of Series B Warrants (defined below). On February 3, 2025, we filed an amendment to our Certificate of Incorporation to increase the our authorized shares of Common Stock from 100,000,000 to 250,000,000.
June 2025 1-for-60 Reverse Stock Split
We filed with the Delaware Secretary of State a Certificate of Amendment to our Certificate of Incorporation which became effective at 4:30 p.m. on June 13, 2025, to implement a reverse stock split at a ratio of 1-for-60 (the “June 2025 Reverse Stock Split”) of the shares of our Common Stock. The June 2025 Reverse Stock Split was approved by our stockholders at the 2025 annual meeting of the stockholders on May 22, 2025.
All shares, options and warrants to purchase shares of Common Stock and loss per share amounts have been adjusted to give retroactive effect to the February and June 2025 reverse share splits, (the “Reverse Stock Splits”) for all periods presented in these condensed consolidated financial statements. Any fractional shares resulting from the Reverse Stock Splits were rounded up to the nearest whole share.
6B ELOC Financing
During the six months ended June 30, 2026, we sold 2,060,000 shares of Common Stock pursuant to the 6B ELOC, generating net proceeds of $1,692 after deducting related offering fees.
On
March 12, 2026, the Company received stockholder approval to issue Purchase Shares in excess of the “Exchange Cap,” as defined
in the ELOC. On March 27, 2026, the Company sold 580,000 shares of Common Stock at an average offering price of $1.03 per share pursuant
to the ELOC for net proceeds of $590, after deducting fees from such sale.
Resignation
of Peter C. Wulff as Chief Financial Officer
Mr.
Wulff resigned as Chief Financial Officer of the Company on March 31, 2026.
Other
income expense, consist primarily of the change in fair value of derivativesderivative liabilities, loss on the issuance of equity, loss on settlement
of debt to equity and finance income.
The
following discussion of our operating results explains material changes in our results of operations for the three and six months ended
June March
31,30, 2026 compared with the same period ended MarchJune 31,30, 2025. The discussion should be read in conjunction with the financial statements
and related notes included elsewhere in this report.
Consolidated
Results of Operations for the Three Months Ended MarchJune 31,30, 2026 and 2025
Research
and development expenses were $2,132approximately $2,016 for the threethree-month monthsperiod ended MarchJune 31,30, 2026, as compared to $1,871approximately $3,150
for the prior-year period. The
increase ofdecrease $261 was primarilyis attributable to increaseda expensesreduction related toin product design, development and manufacturing activitiescosts we accrued during the period
andrelated pre-clinicalto animalthe studies.development of the Glucotrack CBGM model.
General
and administrative expenses were $2,071approximately $1,384 for the threethree-month monthsperiod ended MarchJune 31,30, 2026, as compared to $1,627approximately
$1,646, for the prior-year period. The
increase of $444decrease is primarily attributable to increaseddecreased professional feesfees, and personnel
costs.
Other
expense was $131$414 for the three months ended MarchJune 31,30, 2026, as compared to $3,335$96 for the prior-year period. The decreaseincrease in other expense
iswas primarily attributedattributable to (i) the currentloss yearon reductionextinguishment of debt recognized in connection with the changeissuance of derivativeCommon liabilities.Stock in exchange
for the forgiveness of principal outstanding under the promissory note and (ii) the amortization of the original issue discount associated
with the promissory note.
Net
loss was $4,334$3,814 for the three months ended MarchJune 31,30, 2026, as compared to a net loss of $6,833$4,756 for the prior-year period. The
decrease decrease
in net loss iswas primarily attributable primarily to thelower reductionresearch inand otherdevelopment expenseand general and administrative expenses, as
discussed above.
Consolidated Results of Operations for the Six Months ended June 30, 2026 and 2025
Research and development expenses
Research and development expenses were approximately $4,148 for the six-month period ended June 30, 2026, as compared to approximately $5,021 for the prior-year period. The decrease is attributable to a reduction in product and manufacturing costs we accrued during the period related to the development of the Glucotrack CBGM model.
General and administrative expenses
General and administrative expenses were approximately $3,455 for the six-month period ended June 30, 2026, as compared to approximately $3,273, for the prior-year period. The increase is primarily attributable to increased professional fees, personnel costs.
Change in derivative liability
The change in derivative liability was an increase of $1 for the six months ended June 30, 2026, compared with a decrease of $3,269 for the corresponding period in 2025. The decrease in the prior-year period was primarily attributable to changes in the estimated fair value of the remaining 4,368 Series A and Series B Warrants.
Other (income) expense, net
Other expense was $546 for the six-month period ended June 30, 2026, as compared to approximately $92, for the prior-year period. The increase in other expense was primarily attributable to (i) the loss on extinguishment of debt recognized in connection with the issuance of Common Stock in exchange for the forgiveness of principal outstanding under the promissory note and (ii) the amortization of the original issue discount associated with the promissory note.
Net Loss
Net loss was $8,148 for the six-month period ended June 30, 2026, as compared to $11,589 for the prior-year period. The decrease in net loss was primarily attributable to lower research and development, general and administrative and derivative expenses, as discussed above.
As
of MarchJune 31,30, 2026, we had $3,929$1,124 in cash and cash equivalents compared with $7,383 in cash and cash equivalents as of December 31, 2025.
The net decrease in cash and cash equivalents was attributable to $4,048$7,664 of cash used in operating activities offset by net proceeds
received from financing activities of $591.$1,394.
We
have a history of recurring losses, and as of MarchJune 31,30, 2026, we have an accumulated deficit of $156,172.$159,986. During the threesix months ended
MarchJune 31,30, 2026, we recorded a net loss of $4,334.$8,148. Our primary requirements for liquidity have been to fund product and clinical development
activities and to satisfy our general corporate and working capital needs.
Based
on our operating plans, we do not expect that our current cash and cash equivalents as of MarchJune 31,30, 2026, will be sufficient to fund our
our operating cash flow needs for at least the next twelve months, assuming our programs advance as currently contemplated. Based upon this
this review and our current financial condition, we have concluded that substantial doubt exists as to our ability to continue as a going
concern. We have raised and believe we will continue to be able to raise additional capital through debt financings, private or public
equity financings, license agreements, collaborative agreements or other arrangements with other companies, or other sources of financing.
However, there can be no assurances that such financing will be available or will be on terms acceptable to us, or at all. If we are
unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce, or eliminate our clinical trials or
other operations. If any of these events occur, our ability to achieve our operational goals would be adversely affected. Our future
capital requirements and the adequacy of available funds will depend on many factors, including those described in the section titled
“Risk Factors.” Depending on the severity and direct impact of these factors on us, we may be unable to secure additional
financing to meet our operating requirements on commercially acceptable terms favorable to us, or at all.
GCTK insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding GCTK (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 79,530 | $25.4K | 0.0% | New position |