Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The discussion in this section contains forward-looking statements. These statements relate to future events, our future operations or our future financial performance. We have attempted to identify forward-looking statements by terminology such as "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "should," "would" or "will" or the negative of these terms or other comparable terminology, but their absence does not mean that a statement is not forward-looking. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, which could cause our actual results to differ from those projected in any forward-looking statements we make. Several risks and uncertainties we face are discussed in more detail under "Risk Factors" in Part I, Item 1A of this Annual Report or in the discussion and analysis below. You should, however, understand that it is not possible to predict or identify all risks and uncertainties and you should not consider the risks and uncertainties identified by us to be a complete set of all potential risks or uncertainties that could materially affect us. You should not place undue reliance on the forward-looking statements we make herein because some or all of them may turn out to be wrong. We undertake no obligation to update any of the forward-looking statements contained herein to reflect future events and developments, except as required by law. The following discussion should be read in conjunction with the consolidated financial statements and the notes to those statements included elsewhere in this Annual Report.

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, 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.

Overview

The Company was incorporated on May 18, 2010 under the laws of the State of Delaware. We are 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").

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 measurement to continuous measurement, the Company determined in 2023 that it would focus its efforts on developing the Glucotrack CBGM. As such, the Company withdrew the 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 Type 2 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. Subsequently we announced that a 3-year longevity is feasible leveraging both in-vitro and in-silico test results. We have 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. 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.

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 2^nd 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.

Recent Developments

Corporate and Regulatory

Nasdaq Listing Status

Nasdaq Listing Rule 5550(b)(1) requires companies listed on Nasdaq to maintain a minimum of $2,500,000 in stockholders' equity for continued listing. On May 21, 2024, Nasdaq notified us that our Quarterly Report on Form 10-Q for the period ended March 31, 2024, indicated that we no longer met the Minimum Stockholders' Equity Requirement. Failure to meet the Minimum Stockholders' Equity Requirement was a basis for delisting our Common Stock.

Because we were not in compliance with the Bid Price Rule at the time we were notified about the 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 Hearings 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, 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 from Nasdaq, informing the Company that it had regained compliance with the Minimum Stockholders' Equity Requirement. The Compliance Letter noted, that because the Company's bid price has closed below the minimum required by the Bid Price Rule following the 2024 November Offering (defined below), the Panel had determined to impose on the Company a Discretionary Panel Monitor, pursuant to Listing Rule 5815(d)(4)(B), for a period of one year from the date of the Compliance Letter, to ensure that the Company maintains long-term compliance with the Minimum Stockholders' Equity Requirement, the Bid Price Rule, and all of Nasdaq's continued listing requirements.

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.

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 listing requirements. See "Risk Factors - Our failure to maintain compliance with Nasdaq's continued listing requirements could result in the delisting of our Common Stock."

Reverse Stock Splits

2024 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 May 17, 2024, to implement a 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.

As a result of the 2024 Reverse Stock Split, every five (5) 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 2024 Reverse Stock Split, and any person who would otherwise be entitled to a fractional share of Common Stock as a result of the 2024 Reverse Stock Split was entitled to receive a cash payment equal to the fraction of a share of Common Stock to which such holder would otherwise be entitled, multiplied by the closing price per share of the Common Stock on Nasdaq at the close of business on the date prior to the First Effective Time.

Following the 2024 Reverse Stock Split, the number of shares of Common Stock outstanding was proportionally reduced. The shares of Common Stock underlying the outstanding stock options and warrants were similarly adjusted along with corresponding adjustments to their exercise prices. The 2024 Reverse Stock Split also proportionally reduced the total number of authorized shares of Common Stock from 500,000,000 shares to 100,000,000 shares.

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.

Financing Activity

All information below is stated in thousands of US dollars (except share data).

ATM Sales Agreement

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 agreed to issue and sell shares of Common Stock, having an aggregate offering price of up to $8,230, 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").

On March 21, 2025, we sold 206,300 shares of Common Stock at an average offering price of $18.24 per share pursuant to the Sales Agreement, for net proceeds of $3,593, after deducting fees owed to the Agent from such sale.

During the three months ended June 30, 2025, we sold 414,784 shares of Common Stock at an average offering price of $10.74 per share pursuant to the Sales Agreement for net proceeds of $4,320, after deducting fees owed to the Agent from such sale. As of September 30, 2025, there was no remaining capacity available under the ATM Program.

The shares of Common Stock sold in conformance to the Sales Agreement were offered by us pursuant to a prospectus supplement dated December 17, 2024, and accompanying prospectus dated October 3, 2024, which forms a part of our registration statement on Form S-3 (Registration No. 333-282297) (the "S-3 Registration Statement"), which was declared effective by the Securities and Exchange Commission, on October 3, 2024.

Registered Direct Offering

On February 4, 2025, we entered into a securities purchase agreement with certain institutional investors, relating to the registered direct offering and sale of an aggregate of 43,968 shares of Common Stock at an offering price of $69.00 per share (the "February 2025 Offering"). The net proceeds to us from the February 2025 Offering were approximately $2,752, after deducting fees owed to placement agent and other offering expenses. The February 2025 Offering closed on February 5, 2025.

The shares of Common Stock from the February 2025 Offering were offered by us pursuant to a prospectus supplement dated February 4, 2025, and accompanying prospectus dated October 3, 2024, which forms a part of our S-3 Registration Statement. Dawson James acted as the placement agent for the offerings pursuant to a placement agency agreement, dated February 4, 2025, by and between us and Dawson James.

Private Placement December 2025

On December 29, 2025, we entered into a Securities Purchase Agreement with Armistice Capital Master Fund Ltd. for a private placement of securities (the "Private Placement"). The closing of the Private Placement occurred on December 31, 2025 (the "Closing"). At the Closing, we issued (i) 1,033,591 pre-funded warrants to purchase 1,033,591 shares of Common Stock (the "Pre-Funded Warrants"), and (ii) 2,067,182 warrants to purchase shares of Common Stock (the "Common Warrants"). Each Pre-Funded Warrant was sold with two Common Warrants at a combined purchase price of $3.869, which is equal to the Nasdaq Official Closing Price (as reflected on Nasdaq.com) of the Common Stock on December 29, 2025, minus the exercise price of the Pre-Funded Warrant of $0.001 per share.

In connection with the Private Placement, on December 29, 2025, we entered into a Placement Agency Agreement with Curvature Securities, LLC (the "Placement Agent"). As part of its compensation for acting as Placement Agent for the Private Placement, we paid the Placement Agent a cash fee of 7.0% of the aggregate gross proceeds and issued to the Placement Agent warrants to purchase 124,030 shares of Common Stock at an exercise price of $4.257 per share, which are exercisable at any time on or after the date that is one hundred eighty (180) days from the date of the commencement of sales in connection with the Private Placement, and expire on the five year anniversary of the commencement date (the "Placement Agent Warrants").

We received aggregate net proceeds from the Private Placement of approximately $3,544, after deducting estimated placement agent commissions and expenses in connection with the Private Placement, which were payable by us.

Promissory Note

On September 12, 2025, we entered into a Note Purchase Agreement, with an investor, pursuant to which we issued a Promissory Note to the investor in the principal amount of $3,600 for a purchase price of $3,000.

Warrant Exchange

Beginning on January 6, 2025, through March 15, 2025, we received exchange notices from certain holders of the Series B Warrants, with respect to an aggregate of 54,021 of the Series B Warrants, requiring the delivery of 162,603 shares of Common Stock according to the alternative cashless exercise provision of the Series B Warrants sold in the November 2024 registered direct offering. The remaining 11 Series B Warrants are exchangeable for 11 shares of Common Stock (subject to adjustment in the event of any stock dividend and split, reverse stock split, recapitalization, reorganization or similar transaction).

Warrant Repurchase

During the fiscal year ended December 31, 2025, we repurchased 51,529 of its Series A Warrants from existing warrant holders for $166. The fair value of the Series A Warrants on the date of exercise was $67, resulting in a loss on repurchase of $99.

Financial Overview

Operating Expenses

Research and Development

Research and development expenses consist primarily of salaries and other personnel-related expenses, including stock-based compensation expenses, materials, travel expenses, clinical trials and other expenses. We expect research and development expenses to increase in 2026 and beyond, primarily due to expanding clinical trial activities, hiring additional personnel, as well the development of Glucotrack CBGM; however, we may adjust or allocate the level of our research and development expenses based on available financial resources and based on our commercial needs, including the FDA registration process, specific requirements from customers, development of new Glucotrack CBGM models and other product candidates.

General and Administrative

General and administrative expenses consist primarily of professional services, salaries, travel expenses and other related expenses for executive, finance and administrative personnel, including stock-based compensation expenses. Other general and administrative costs and expenses include facility-related costs not otherwise included in research and development costs and expenses, and professional fees for legal, accounting, media, and public and investor relation services.

Other (Income) Expense

Other income expense, consist primarily of the change in fair value of derivatives liabilities, loss on the issuance of equity, loss on settlement of debt to equity and finance income.

Results of Operations - Comparison of the Years Ended December 31, 2025 and 2024

All information below is stated in thousands of US dollars.

The following discussion of our operating results explains material changes in our results of operations for the years ended December 31, 2025 and December 31, 2024. The discussion should be read in conjunction with the financial statements and related notes included elsewhere in this Annual Report.

Research and Development Expense

Research and development expenses were $9,813 for the year ended December 31, 2025, as compared to $9,499 for the prior-year period. The increase of $314 was primarily attributable to increased expenses related to product design, development and manufacturing activities and pre-clinical animal studies.

General and Administrative Expense

General and administrative expenses were $6,277 for the year ended December 31, 2025, as compared to $5,048 for the prior-year period. The increase of $1,229 is primarily attributable to increased professional fees, personnel costs and placement agent fees.

Share-based compensation expense included in research and development and selling, general and administrative expense, for the fiscal years ended December 31, 2025 and 2024, was comprised as follows:

		December 31, 2025				December 31, 2024
Research and development			124				307
General and administrative			87				364
			211				671

The decrease in share-based compensation expense is primarily attributable to a reduction in the fair value of shares issued for Board compensation and shares issued under IP agreements.

Other (Income) Expense, net

Other expense was $3,298 for the year ended December 31, 2025, as compared to other income $8,050 for the prior-year period. The decrease in other expense is primarily attributed to reductions in recognized losses on the settlement of debt and reduced losses from the issuance of equity. These reductions were offset by the current year fair value change in derivative liabilities.

Net Loss

Net loss was $19,388 for the year ended December 31, 2025, as compared to a net loss of $22,579 for the prior-year period. The decrease in net loss is attributable primarily to the reduction in other expense discussed above.

Liquidity and Going Concern

As of December 31, 2025, we had $7,383 in cash and cash equivalents compared with $5,627 in cash, cash equivalents and restricted cash as of December 31, 2024. The net increase in cash and cash equivalents was attributable to the $17,043 of net proceeds received from financing activities offset by cash used in operating and investing activities of $15,336.

We have a history of recurring losses, and as of December 31, 2025, we have an accumulated deficit of $151,838. During the fiscal year ended December 31, 2025, we recorded a net loss of $19,388. 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 December 31, 2025, will be sufficient to fund our operating cash flow needs for at least the next twelve months, assuming our programs advance as currently contemplated. Based upon 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 at 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.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based on our audited consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following accounting policies and estimates are critical to aid you in understanding and evaluating our reported financial results.

Share-Based Compensation

We grant equity-based awards under share-based compensation plans. We estimate the fair value of share-based payment awards using the Black-Scholes option valuation model. This fair value is then amortized over the requisite service periods of the awards. The Black-Scholes option valuation model requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest rate, dividend yield, and expected life of the option. Share-based compensation expense is based on awards ultimately expected to vest and therefore is reduced by expected forfeitures. Changes in assumptions used under the Black-Scholes option valuation model could materially affect our net loss and net loss per share.

Derivative Financial Instruments

We review the terms of the Common Stock, warrants and convertible debt we issue to determine whether there are derivative instruments, including embedded conversion options that are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including a conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

Derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value.

Recent Accounting Pronouncements

Information regarding recent accounting pronouncements is contained in Note 2 to the Consolidated Financial Statements, included elsewhere in this report, and is incorporated by reference.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.