10-Q: Glucotrack Reports Q3 Loss, Advances CBGM Clinical Trials

Glucotrack, Inc. reported an increased net loss for Q3 2025, alongside positive first-in-human clinical trial results for its implantable continuous blood glucose monitor and ongoing efforts to secure future financing.

Summary

• Net loss for the nine months ended September 30, 2025, increased to $15,760 thousand, compared to $12,503 thousand for the same period in 2024.
• Cash and cash equivalents stood at $7,869 thousand as of September 30, 2025, up from $5,617 thousand at December 31, 2024.
• The company has an accumulated deficit of $148,210 thousand as of September 30, 2025, and management has raised substantial doubt about its ability to continue as a going concern.
• A first-in-human (FIH) short-term clinical study for the Glucotrack CBGM was completed in Q1 2025, meeting all primary and secondary endpoints with a Mean Absolute Relative Difference (MARD) of 7.7%.
• A long-term clinical study outside the United States has been initiated, but protocol amendments and product improvements are underway due to early learnings on participant eligibility.
• Discussions with the FDA for a pre-investigational device exemption (IDE) submission have begun, with an expected filing in Spring 2026.
• The company completed two reverse stock splits in 2025: 1-for-20 in February and 1-for-60 in June, and increased authorized common stock to 250,000,000 shares.
• During the nine months ended September 30, 2025, $10.7 million was raised through equity sales and $3.0 million from a promissory note.
• Material weaknesses in internal control over financial reporting were identified, specifically in general IT controls, lack of sufficient accounting personnel, and inadequate segregation of duties.

Sentiment

Score: 4

Explanation: While the company reported positive early clinical trial results and successfully raised capital, these positives are significantly overshadowed by an increased net loss, a substantial accumulated deficit, a going concern warning, and identified material weaknesses in internal controls. The need for clinical study protocol amendments also introduces uncertainty and potential delays.

Positives

• Successfully completed a first-in-human (FIH) short-term clinical study for the Glucotrack CBGM, meeting all primary and secondary endpoints.
• The FIH study demonstrated excellent accuracy with a Mean Absolute Relative Difference (MARD) of 7.7% across 122 matched pairs, which compares favorably to commercially available CGM systems.
• No procedure or device-related serious adverse events were reported from implant through seven days post-removal of the CBGM sensor lead in the FIH study.
• The function of the CBGM sensor lead in the subclavian vein was confirmed, with successful placement and removal procedures performed by interventional cardiologists.
• Raised $10.7 million through public equity offerings and $3.0 million from a promissory note during the nine months ended September 30, 2025, increasing cash and cash equivalents to $7,869 thousand.
• Net loss for the three months ended September 30, 2025, decreased to $4,171 thousand from $5,087 thousand in the prior-year period, primarily due to reduced revaluation expenses.
• Received a non-recurring research grant, contributing to other income.

Negatives

• Net loss for the nine months ended September 30, 2025, increased to $15,760 thousand from $12,503 thousand in the prior-year period.
• Accumulated deficit reached $148,210 thousand as of September 30, 2025.
• The company has a history of recurring losses and negative cash flow from operations since inception.
• Management concluded that substantial doubt exists about the company's ability to continue as a going concern, as current cash is not expected to fund operations for the next twelve months.
• Identified material weaknesses in internal control over financial reporting, including general IT controls, insufficient accounting personnel, and inadequate segregation of duties.
• Research and development expenses increased to $8,186 thousand for the nine months ended September 30, 2025, from $7,800 thousand in the prior-year period.
• General and administrative expenses increased to $3,987 thousand for the nine months ended September 30, 2025, from $2,598 thousand in the prior-year period.
• The long-term clinical study is undergoing protocol amendments and product improvements due to early learnings about participant eligibility, which may indicate unforeseen challenges or delays.
• The Promissory Note issued on September 12, 2025, had a principal amount of $3,600,000 but was purchased for $3,000,000, reflecting a significant original issue discount of $600,000.
• Amendment No. 1 to the Promissory Note removed its convertible feature, limiting potential equity upside for the holder.

Risks

• The company is dependent upon external sources for financing its operations and there is no assurance that necessary financing will be obtained or sufficient revenue generated to continue as a going concern.
• Material weaknesses in internal control over financial reporting could adversely affect the company's ability to record, process, summarize, and report financial information accurately and timely.
• The long-term clinical study is undergoing protocol amendments and product improvements, which could lead to delays, increased costs, or impact study outcomes.
• The company needs to secure FDA IDE approval for future long-term human clinical trials in the United States, with the submission expected in Spring 2026, introducing regulatory and timeline uncertainties.
• A contingent liability of approximately $93 thousand plus interest exists with the Israeli Innovation Authority for royalty payments on future sales, with no expiration date.

Future Outlook

The company expects research and development expenses to increase in 2025 and beyond due to expanding clinical trial activities, hiring additional personnel, and the development of the Glucotrack CBGM. It intends to proceed swiftly with relevant protocol amendments and product enhancements for its long-term clinical study, subject to institutional review board approval. The company anticipates filing its IDE submission to the FDA during the Spring of 2026 for future long-term human clinical trials in the United States. Management believes its technology, if successful, has the potential to be a long-term, implantable system that continually measures blood glucose levels with a sensor longevity of 3 years, no on-body wearable component, and minimal calibration. The company plans to finance its operations through the sale of equity and/or debt securities.

Management Comments

• "We believe that implant accuracy and longevity is key to the success for long term use."
• "We are committed to advancing our clinical program and intend to proceed swiftly with the relevant protocol amendments and product enhancements, subject to approval by the institutional review board."
• "We believe our technology, if successful, has the potential to be a long-term, implantable system that continually measures blood glucose levels with a sensor longevity of 3 years, no on-body wearable component and with minimal calibration."
• "Management has considered the significance of such conditions in relation to the Companys ability to meet its current obligations and to achieve its business targets and determined that these conditions raise substantial doubt about the Companys ability to continue as a going concern."

Industry Context

Glucotrack operates in the highly competitive diabetes management market, specifically focusing on continuous glucose monitoring (CGM). Its implantable CBGM aims to differentiate itself by measuring glucose directly from blood, eliminating the lag time associated with traditional interstitial fluid glucose monitors. The emphasis on a three-year sensor life and no on-body wearable component addresses key patient convenience and adherence issues prevalent in the current CGM landscape. The company's engagement with the FDA for IDE submission highlights the significant regulatory hurdles and capital intensity typical for novel medical device development in this sector.

Comparison to Industry Standards

• The first-in-human (FIH) clinical study demonstrated excellent accuracy with a Mean Absolute Relative Difference (MARD) of 7.7% across 122 matched pairs, which compares favorably to commercially available CGM systems.

Management Changes

Corporate Governance

Legal Proceedings

• As of September 30, 2025, the company did not have any pending claims, charges, or litigation that were expected to have a material adverse impact on its financial position, results of operations, or cash flows.

Related Party Transactions

• An Intellectual Property Purchase Agreement was entered into with Paul Goode (CEO) on October 7, 2022, for intellectual property related to an implantable continuous glucose sensor. Consideration includes cash ($1) and up to 10,000 shares of Common Stock based on performance milestones, plus potential True-Up Shares.
• On June 27, 2024, the company entered into note and warrant purchase agreements with certain officers, directors, and existing investors for unsecured promissory notes in the aggregate principal amount of $100 thousand and warrants.
• On July 18, 2024, the company entered into a series of convertible promissory notes with three directors and one member of executive management for an aggregate principal amount of $360 thousand.
• On April 22, 2024, a private placement offering included participation from certain members of the company's executive management, Board of Directors, and existing shareholders, who purchased 67 shares of Common Stock for $500 thousand.

Stakeholder Impact

• Shareholders face potential dilution from future equity raises and uncertainty due to the going concern warning, but could benefit from long-term success of the CBGM.
• Employees' job security and potential stock-based compensation are tied to the company's ability to secure financing and achieve development milestones.
• Future customers could benefit from a novel, convenient, and accurate continuous glucose monitoring solution if the CBGM is successfully commercialized.
• Creditors, including the holder of the recent Promissory Note, face risks associated with the company's going concern status, although the note is unsecured and due in one year.
• Investors in the Promissory Note had its convertible feature removed, limiting potential equity upside, but the note is due in one year.

Next Steps

• Advance the long-term clinical study outside the United States, including implementing protocol amendments and product improvements.
• Obtain approval from the institutional review board for protocol amendments and product enhancements.
• Continue active review with the FDA to accommodate their requirements for future long-term human clinical trials in the United States.
• File the pre-investigational device exemption (IDE) submission to the FDA during the Spring of 2026.
• Implement corrective actions to remediate material weaknesses in internal control over financial reporting, including proper IT system access controls, IT architecture backup, outsourcing certain accounting functions, and hiring additional accounting personnel.
• Seek additional capital through debt financing, private or public equity financings, license agreements, collaborative agreements, or other arrangements.
• Obtain stockholder approval to issue Purchase Shares in excess of the Exchange Cap under the Equity Line of Credit (ELOC).

Key Dates

Recommendation

Despite positive early clinical trial results for its CBGM and recent capital raises, Glucotrack, Inc. faces severe financial distress, explicitly stating "substantial doubt about the Company's ability to continue as a going concern." The significant accumulated deficit, recurring operating losses, and negative cash flow indicate a precarious financial position. Furthermore, the identified material weaknesses in internal controls raise concerns about financial reporting reliability. While the CBGM technology shows promise, the long regulatory pathway, potential delays in clinical trials due to protocol amendments, and the ongoing need for substantial additional financing in a challenging market make the stock a high-risk investment with significant downside potential. The removal of the convertible feature from the recent promissory note also removes a potential upside for that specific debt holder.

Keywords

Glucotrack, CBGM, continuous glucose monitor, diabetes, medical device, clinical trials, FDA, financial results, going concern, internal controls, equity financing, promissory note, GCTK