10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2020

or

[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ________________ to ________________

Commission File Number: 000-54785

INTEGRITY APPLICATIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware	98-0668934
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
19 Ha’Yahalomim Street P.O. Box 12163 Ashdod, Israel	L3 7760049
(Address of principal executive offices)	(Zip Code)

972 (8) 675-7878

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [  ]	Accelerated filer [  ]
Non-accelerated filer [X]	Smaller reporting company [X]
Emerging growth company [  ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

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

As of November 12, 2020, 200,669,064 shares of the Company’s common stock, par value $0.001 per share, were outstanding.

INTEGRITY APPLICATIONS, INC.

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.	3
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Operations and Comprehensive Loss	4
Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit)	5
Condensed Consolidated Statements of Cash Flows	6
Notes to Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	12
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	17
Item 4. Controls and Procedures.	17
PART II - OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 6. Exhibits.	18
EXHIBIT INDEX	18
SIGNATURES	19

2

INTEGRITY APPLICATIONS, INC.

PART I - FINANCIAL INFORMATION

CONDENSED CONSOLIDATED BALANCE SHEETS

Item 1. Financial Statements.

	US dollars (except share data)
	September 30, 2020			December 31, 2019
	(Unaudited)
Current Assets
Cash and cash equivalents		10,706,646			418,621
Accounts receivable, net		71,284			70,161
Inventory		280,672			184,602
Other current assets		55,587			44,658
Total current assets		11,114,189			718,042
Operating lease right-of-use assets, net		153,200			187,232
Property and equipment, net		147,791			133,795
Non-current Restricted Cash		57,653			57,092
TOTAL ASSETS		11,472,833			1,096,161
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Accounts payable		842,928			1,534,078
Operating lease liabilities, current		136,457			142,090
Other current liabilities		339,200			596,087
Total Current Liabilities		1,318,585			2,272,255
Non-current Liabilities
Long-Term Loans from Stockholders		190,894			190,365
Operating lease liabilities, non-current		16,743			45,143
Total Non-current liabilities		207,637			235,508
Total Liabilities		1,526,222			2,507,763
Stockholders’ Equity (Deficit)
Common Stock of $ 0.001 par value (“Common Stock”):
500,000,000 shares authorized; 200,669,064 and 161,858,436 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively		200,669			161,858
Additional paid-in capital		102,118,435			89,005,407
Receipts on account of shares		47,376			-
Accumulated other comprehensive income		100,017			124,062
Accumulated deficit		(92,519,886	)		(90,702,929	)
Total Stockholders’ equity (deficit)		9,946,611			(1,411,602	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)		11,472,833			1,096,161

The accompanying notes are an integral part of these condensed consolidated financial statements

3

INTEGRITY APPLICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	US dollars (except share data)						US dollars (except share data)
	Nine-month period ended September 30,						Three-month period ended September 30,
	(Unaudited)						(Unaudited)
	2020			2019			2020			2019
Revenue		2,271			140,255			-			4,175
Research and development		1,270,295			1,203,616			476,364			377,377
Selling and marketing expenses		274,183			444,555			93,366			168,259
General and administrative		711,795			1,391,916			317,597			439,012
Total operating expenses		2,256,273			3,040,087			887,327			984,648
Operating Loss		(2,254,002	)		(2,899,832	)		(887,327	)		(980,473	)
Other income		338,067			-			338,067			-
Finance Income (expense), net:		98,978			(17,455	)		40,245			(16,304	)
Net Loss		(1,816,957	)		(2,917,287	)		(509,015	)		(996,777	)
Other comprehensive expenses:
Foreign currency translation adjustment		(24,045	)		(29,625	)		(18,044	)		(2,987	)
Comprehensive loss for the period		(1,841,002	)		(2,946,912	)		(527,059	)		(999,764	)
Net Loss per Common Share
Basic		(0.01	)		(0.01	)		(0.00	)		(0.01	)
Diluted		(0.01	)		(0.01	)		(0.00	)		(0.01	)
Average number of common shares used in computing basic and diluted loss per share		194,312,810			152,240,776			200,537,588			162,012,688

The accompanying notes are an integral part of the condensed consolidated financial statements.

4

INTEGRITY APPLICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

	US Dollars ( except share data)
	(Unaudited)
	Common Stock				Additional		Receipts on account			Accumulated Other						Total Stockholders’
	Numbers of Shares		Amount		Paid-in Capital		of shares			Comprehensive Loss			Accumulated Deficit			Equity (Deficit)
Balance at January 1, 2019		141,634,700		141,638		84,007,612		-			164,232			(87,186,783	)		(2,873,301	)
Loss for the period		-		-		-		-			-			(2,917,287	)		(2,917,287	)
Other comprehensive loss		-		-		-		-			(29,625	)		-			(29,625	)
Amounts allocated to Series D-1, D-2 and Series D-3 Warrants, net		-		-		31,915		-			-			-			31,915
Amount allocated to issuance of Common Stock from Series D offering		18,889,618		18,892		3,898,155		-			-			-			3,917,047
Issuance of shares as settlement of financial liabilities		1,190,141		1,190		305,866		-			-			-			307,056
Warrants issued as consideration for placement agent services		-		-		249,612		-			-			-			249,612
Stock-based compensation		348,840		351		451,416		-			-			-			451,767
Balance at September 30, 2019		162,063,299		162,071		88,944,576		-			134,607			(90,104,070	)		(862,816	)
Balance at July 1, 2019		161,947,019		161,955		88,823,095		-			137,594			(89,107,293	)		15,351
Loss for the period		-		-		-		-			-			(996,777	)		(996,777	)
Other comprehensive loss		-		-		-		-			(2,987	)		-			(2,987	)
Stock-based compensation		116,280		116		121,481		-			-			-			121,597
Balance at September 30, 2019		162,063,299		162,071		88,944,576		-			134,607			(90,104,070	)		(862,816	)
Balance at January 1, 2020		161,858,436		161,858		89,005,407		-			124,062			(90,702,929	)		(1,411,602	)
Loss for the period		-		-		-		-			-			(1,816,957	)		(1,816,957	)
Other comprehensive loss		-		-		-		-			(24,045	)		-			(24,045	)
Issuance of Common Stock, net		37,500,000		37,500		12,215,682		-			-			-			12,253,182
Issuance of shares as settlement of financial liabilities		1,310,628		1,311		119,581		47,376			-			-			168,268
Warrants issued as consideration for placement agent services		-		-		756,087		-			-			-			756,087
Stock-based compensation		-		-		21,678		-			-			-			21,678
Balance at September 30, 2020		200,669,064		200,669		102,118,435		47,376			100,017			(92,519,886	)		9,946,611
Balance at July 1, 2020		200,525,066		200,525		102,052,553		62,086			118,061			(92,010,871	)		10,422,354
Loss for the period		-		-		-		-			-			(509,015	)		(509,015	)
Other comprehensive loss		-		-		-		-			(18,044	)		-			(18,044	)
Issuance of shares as settlement of financial liabilities		143,998		144		57,455		(14,710	)		-			-			42,889
Stock-based compensation		-		-		8,427		-			-			-			8,427
Balance at September 30, 2020		200,669,064		200,669		102,118,435		47,376			100,017			(92,519,886	)		9,946,611

The accompanying notes are an integral part of these condensed consolidated financial statements

5

INTEGRITY APPLICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGE IN CASH FLOWS

	US Dollars
	Nine-month period ended September 30.
	2020			2019
	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period	$	(1,816,957	)	$	(2,917,287	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		35,391			38,253
Stock-based compensation		21,678			451,767
Linkage difference on principal of loans from stockholders		(1,335	)		5,708
Changes in assets and liabilities:
Increase in accounts receivable		(437	)		(5,777	)
Decrease (increase) in inventory		(94,262	)		43,140
Increase in other current assets		(10,604	)		(23,566	)
Decrease in accounts payable		(359,719	)		(573,014	)
Gain from settlement of liability to service provider		(338,067	)		-
Decrease in other current liabilities		(92,522	)		(121,732	)
Net cash used in operating activities		(2,656,834	)		(3,102,508	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(45,900	)		(22,554	)
Net cash used in investing activities		(45,900	)		(22,554	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock, net of cash issuance expenses		13,009,269			4,165,079
Proceeds allocated to Series D Warrants, net of cash issuance expenses		-			33,495
Net cash provided by financing activities		13,009,269			4,198,574
Effect of exchange rate changes on cash and cash equivalents, and restricted cash		(17,949	)		55,708
Change in cash, cash equivalents, and restricted cash		10,288,586			1,129,220
Cash, cash equivalents, and restricted cash at beginning of the period		475,713			149,684
Cash, cash equivalents, and restricted cash, end of period	$	10,764,299		$	1,278,904

Supplementary information on financing activities not involving cash flows (unaudited):

During the period of nine months ending September 30, 2020 and 2019, the Company settled liability to the board members and management in the amount of approximately $168 and $307 thousand, respectively via issuance of common stocks.

During the period of nine months ending September 30, 2020, $756,087 representing the fair value of warrants issued as consideration for placement agent services. This amount was accounted for as Warrants with down-round protection. Upon issuance, the fair value was recognized as an increase in additional paid in capital.

The accompanying notes are an integral part of the condensed consolidated financial statements.

6

INTEGRITY APPLICATIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1 – GENERAL

A.

Integrity Applications, Inc. (the “Company”) was incorporated on May 18, 2010 under the laws of the State of Delaware. On July 15, 2010, Integrity Acquisition Corp. Ltd. (hereinafter: “Integrity Acquisition”), a wholly owned Israeli subsidiary of the Company, which was established on May 23, 2010, completed a merger with A.D. Integrity Applications Ltd. (hereinafter: “Integrity Israel”), an Israeli corporation that was previously held by the stockholders of the Company. Pursuant to the merger, all equity holders of Integrity Israel received the same proportional ownership in the Company as they had in Integrity Israel prior to the merger. Following the merger, Integrity Israel became a wholly-owned subsidiary of the Company. As the merger transaction constituted a structural reorganization, the merger has been accounted for at historical cost in a manner similar to a pooling of interests. Integrity Israel was incorporated in 2001 and commenced its operations in 2002. Integrity Israel, a medical device company, focuses on the design, development and commercialization of non-invasive glucose monitoring devices for use by people with diabetes and prediabetes.

B.

Since its incorporation, the Company’s material operations have all been carried out by Integrity Israel. The development and commercialization of Integrity Israel’s product is expected to require substantial expenditures. The Company has not yet generated significant revenues from operations, and therefore they are dependent upon external sources for financing their operations. As of September 30, 2020, the Company has an accumulated deficit of $92,519,886. In addition, in each year since its inception, the Company reported losses from operations and negative cash flows from operating activities As described in Note 3, on February 14, 2020, the Company closed on a $15 million private placement of its common stock, for which it received net cash in excess of $13,009,269. As of September 30, 2020, the company has cash, cash equivalents and restricted cash in the amount of $10,764,299, which is expected to be sufficient to meet its capital needs for at least 12 months from the date of issuance of these financial statements, thus the Company is expected to be able to operate as a going concern for at least 12 months from the date hereof.

7

INTEGRITY APPLICATIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (cont.)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.	Basis of presentation
	Accounting Principles
	The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Securities and Exchange Commission (“SEC”) on April 14, 2020. The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC related to interim financial statements. As permitted under those rules, certain information and footnote disclosures normally required or included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are considered necessary to present fairly the results of the Company’s financial position and operating results for the interim periods. All such adjustments are of a normal recurring nature
	The results for the nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any other interim period or for any future period.
	Principles of Consolidation
	The consolidated financial statements include the accounts of the Company and its subsidiary. Significant intercompany balances and transactions have been eliminated in consolidation.
	Loss Per Share
	The Company computes net loss per share in accordance with ASC 260, “Earnings per share”. Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, net of the weighted average number of treasury shares (if any).
	Diluted loss per common share is computed similar to basic loss per share, except that the denominator is increased to include the number of additional potential shares of common stock that would have been outstanding if the potential shares of common stock had been issued and if the additional shares of common stock were dilutive. Potential shares of common stock are excluded from the computation for a period in which a net loss is reported or if their effect is anti-dilutive.
	An amount of 81,346,964 and 78,900,534 weighted average outstanding stock options and stock warrants have been excluded from the calculation of the diluted net loss per share for the period of nine months ended September 30, 2020 and 2019, respectively, because the effect of the common shares issuable as a result of the exercise or conversion of these instruments was determined to be anti-dilutive.
	An amount of 83,518,512 and 81,527,505 weighted average outstanding stock options and stock warrants have been excluded from the calculation of the diluted net loss per share for the period of three Months ended September 30, 2020 and 2019, respectively, because the effect of the common shares issuable as a result of the exercise or conversion of these instruments was determined to be anti-dilutive.

8

INTEGRITY APPLICATIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont.)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

B. Use of estimates in the preparation of financial statements

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to determination of net realizable value of inventory.

C. Reclassified Amounts

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications did not have material effect on the reported results of operations, shareholder’s equity or cash flows.

NOTE 3 – RECENT EVENTS

A.	On January 21, 2020, the Company announced that it has received CE Mark approval for a major enhancement to GlucoTrack, allowing for a user to perform the calibration process by themselves, without the need for a certified calibrator. The initial CE Mark approval received for GlucoTrack required a calibration process that took three hours to complete, required eight invasive finger stick reference measurements, needed to be repeated every thirty days and required a certified calibrator to perform the calibration. After a series of successful enhancements and approvals, the calibration process now takes just thirty minutes, requires just three invasive reference measurements, and needs to be repeated only once every nine months. With self-calibration, a user can now perform this simplified process in the privacy and convenience of their own home.
B.	On February 14, 2020, the Company entered into a Securities Purchase Agreement and Registration Rights Agreement (collectively, the “Agreements”) with an accredited investor, pursuant to which the accredited investor purchased 37,500,000 shares of the Company’s common stock, par value $0.001 per share, for an aggregate gross purchase price of $15,000,000. The Company received net proceeds of $13,009,269 after payment of fees to its placement agent and legal and accounting fees.
	In connection with the agreement, the Company’s placement agent was paid $1,950,000 in fees in connection therewith, and issued five years warrant to purchase 3,750,000 shares at an exercise price per share of $0.40 with terms similar to the terms of the Placement Agent Warrants issued in 2019. The fair value of the warrants as of the agreement date was $756,087.
C.	The Company may be at risk as a result of the current COVID-19 pandemic. Risks that could affect its business include the duration and scope of the COVID-19 pandemic and the impact on the demand for its products; actions by governments, businesses and individuals taken in response to the pandemic; the length of time of the COVID-19 pandemic and the possibility of its reoccurrence; the timing required to develop effective treatments and a vaccine in the event of future outbreaks; the eventual impact of the pandemic and actions taken in response to the pandemic on global and regional economies; and the pace of recovery when the COVID-19 pandemic subsides.

9

INTEGRITY APPLICATIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (cont.)

NOTE 4 – LEASES

The Company has entered into several non-cancellable operating lease agreements for the Company’s offices and three vehicles. the Company’s leases have original lease periods expiring between 2020 and 2022. Payments due under such lease contracts include primarily fix payments. the Company does not assume renewals in its determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. the company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The components of lease costs, lease term and discount rate are as follows:

	US dollars
	Nine Months Ended
	September 30, 2020
		(unaudited)
Operating lease cost:
Office space		89,009
Vehicles		29,204
		118,213
Remaining Lease Term
Office space		0.92 years
Vehicles		1.64 years
Weighted Average Discount Rate
Office space		10	%
Vehicles		10	%

10

INTEGRITY APPLICATIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (cont.)

NOTE 4 – LEASES (cont.)

The following is a schedule, by years, of maturities of operating lease liabilities as of September 30, 2020:

	US dollars
	September 30, 2020
		(unaudited)
Period:
The remainder of 2020		45,842
2021		104,552
2022		11,119
Total operating lease payments		161,513
Less: imputed interest		8,313
Present value of lease liabilities		153,200

NOTE 5 – FINANCING INCOME (EXPENSES), NET

	US dollars						US dollars
	Nine-month period ended September 30,						Three-month period ended September 30,
	2020			2019			2020			2019
	(Unaudited)						(Unaudited)
Israeli CPI linkage difference on principal of loans from stockholders		1,335			(5,708	)		(171	)		(1,843	)
Exchange rate differences		(4,499	)		1,808			2,020			(8,761	)
Interest income on credit in bank		105,072			-			47,833			-
Others		(2,930	)		(13,555	)		(9,437	)		(5,700	)
		98,978			(17,455	)		40,245			(16,304	)

11

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking statements include statements about our expectations, beliefs or intentions regarding our product development efforts, business, financial condition, results of operations, strategies and prospects. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q, including statements regarding our future activities, events or developments, including such things as future revenues, capital raising and financing, product development, clinical trials, regulatory approval, market acceptance, responses from competitors, capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, competitive strengths, goals, expansion and growth of our business and operations, plans, references to future success, projected performance and trends, and other such matters, are forward-looking statements. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “plan,” “may,” “will,” “could,” “would,” “should” and other similar words and phrases, are intended to identify forward-looking statements. The forward-looking statements made in this Quarterly Report on Form 10-Q are based on certain historical trends, current conditions and expected future developments as well as other factors we believe are appropriate in the circumstances. These statements relate only to events as of the date on which the statements are made and we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. All of the forward-looking statements made in this Quarterly Report on Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on us or our business or operations. Whether actual results will conform to our expectations and predictions is subject to a number of risks and uncertainties that may cause actual results to differ materially. Risks and uncertainties, the occurrence of which could adversely affect our business, include the risks identified under the caption “Risk Factors” included in our annual report on Form 10-K for the year ended December 31, 2019. The following discussion should be read in conjunction with the condensed consolidated financial statements and the notes thereto included in Item 1 of this Quarterly Report on Form 10-Q.

Overview

We are a medical device company, founded in 2001, focused on the design, development and commercialization of non-invasive glucose monitoring devices for use by people with diabetes and prediabetes. We have developed a non-invasive blood glucose monitor, the GlucoTrack® model DF-F glucose monitoring device, which is designed to help people with diabetes obtain blood glucose level readings without the pain, inconvenience, cost and difficulty of conventional (invasive) spot finger stick devices. The GlucoTrack® model DF-F utilizes a patented combination of ultrasound, electromagnetic and thermal technologies to obtain blood glucose measurements in less than one minute via a small sensor that is clipped onto one’s earlobe and connected to a small, handheld control and display unit, all without drawing blood.

We are currently nearing the completion of our own companion mobile application for both Android and iOS and a cloud-based solution, to offer a digital platform to provide real time, data driven personalized tools to effectively help a user manage their diabetes. In addition to being a critical and effective management tool for the end user, we believe that third parties such as insurers, pharmaceutical companies and advertisers would be willing to pay for the de-identified data that we will obtain through our platform, and that this is an opportunity for us to develop an additional revenue source. We are also nearing the completion of the GT-Link®, a technology that enables the current version of GlucoTrack® to be Bluetooth and wi-fi enabled.

In June 2013, we received the initial Conformité Européene (CE) Mark (indicating the conformity of the Company’s product with health, safety, and environmental protection standards for products sold within the European Economic Area) approval for the GlucoTrack® model DF-F non-invasive glucose monitoring device from DEKRA Certification B.V., our European notified body (the “Notified Body”), which is an entity that has been accredited by a member state of the European Union (“EU”) to assess whether a product to be placed on the market meets certain preordained standards.

This original approval required that the device be re-calibrated every 30 days, with each such re- calibration taking between 2.5 and 3 hours to complete. In 2014, we received CE Mark approval for nine months’ calibration validity of the same device. This approval eliminated the need for monthly re-calibrations and enabled the calibration process to be conducted only when the sensor is replaced, once every 6 months. In 2015, we received a further approval from the Notified Body for improvements to the GlucoTrack® model DF-F to simplify and shorten the initial calibration process for the device (from approximately 2.5 hours to approximately half an hour). All these improvements enhance the competitiveness of the device and its commercial viability. In addition, we received approval from the Notified Body on the updated intended use for the device, which expands the intended user population to include not only Type 2 diabetics, but also people suffering from pre-diabetes conditions, which we believe represents a material expansion of the potential market for the device. Also in 2015, we received approval from the Notified Body for further improvements to the GlucoTrack® model DF-F that increase the accuracy and efficacy of the device.

On January 21, 2020, the Company announced that it has received CE Mark approval for a major enhancement to GlucoTrack, allowing for a user to perform the calibration process by themselves, without the need for a certified calibrator. The initial CE Mark approval received for GlucoTrack required a calibration process that took three hours to complete, required eight invasive finger stick reference measurements, needed to be repeated every thirty days and required a certified calibrator to perform the calibration. After a series of successful enhancements and approvals, the calibration process now takes just thirty minutes, requires just three invasive reference measurements, and needs to be repeated only once every six months. With self-calibration, a user can now perform this simplified process in the privacy and convenience of their own home. As a result of these incremental, but important, enhancements to the performance of the device, we believe that the product is ready for commercial launch in specific market segments.

We continue to invest resources on our intellectual property to protect our existing patents and trademarks, and anticipate additional patents for our existing technology, as well as future products in development. In addition, we are exploring improvements and changes to our algorithms and sensor technologies with a goal of increasing our Mean Absolute Relative Difference (MARD) and overall accuracy.

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Safety and quality are non-negotiables in the medical devices industry. Regulatory requirements are increasingly stringent throughout every step of a product’s life cycle, including service and delivery. More and more, organizations in the industry are expected to demonstrate their quality management processes and ensure best practice in everything they do. ISO 13485, is an internationally agreed standard that sets out the requirements for a quality management system specific to the medical devices industry. On February 19, 2016, we received an extension of our ISO 13485:2003 certificate and Annex II certification from the EU. The ISO 13485:2003 certification signifies that we have met the standards required for company-wide implementation of device quality management system(s). The scope of the certification is design, development, manufacture and service of non-invasive glucose monitoring systems for home use. Annex II also addresses quality control systems. The certification allows us to self-certify certain modifications and changes and simplifies some of the reporting to and review by the relevant Notified Body. This can shorten the CE-mark review process of future GlucoTrack® model DF-F enhancements or revisions, including software updates and other improvements of the device that do not affect the intended use and/or safety performance. The ISO 13485:2003 and Annex II certifications enable us to potentially reduce the time to market for product sales on new, enhanced or modified GlucoTrack® model DF-F devices.

We have identified, what we believe, are the critical success factors necessary for the successful commercialization of Glucotrack®. These factors include: 1) selecting the right distribution partner within countries that have knowledge and experience in diabetes, the appropriate capabilities and proven performance in the sales, marketing, and customer service in support of medical devices, and a commitment to investing the appropriate resources required for a successful launch and building of the business; 2) segmenting and targeting the right customers including key opinion leaders, treating physicians, and diabetes nurses within the healthcare provider communities as well as those patient groups that will benefit most from the use of a non-invasive device; 3) creating a cost structure and end user price point for GlucoTrack® so that it will be more affordable on a monthly basis for patients; and 4) working with government authorities and health insurance companies to achieve full or partial reimbursement for GlucoTrack® within covered medical plans.

We have started the implementation of this commercial approach with the Netherlands, and signed an exclusive distribution agreement with MediReva B.V. We have been working closely with our new distributor on product and disease area training across the organization, and segmentation of the local target audiences including key opinion leaders, treating physicians, and diabetes nurses. An important aspect of our launch preparations are the discussions being held with many health insurance companies. Approval of full or partial reimbursement by the health insurance companies will be a key factor in enabling us to achieve significant sales volume. We are currently working with several of these insurance companies on steps towards reimbursement approval. In addition to the Netherlands, we are in the process of identifying and negotiating with additional distributors in other key geographic regions.

Following our successful capital raise in the first quarter of this year of $15,000,000, we have been planning for an up-listing of our Common Stock to a national exchange. While we believe we have been taking the appropriate steps to up-list, we cannot provide assurances at this time as to whether and when we will be successful with respect to this plan.

This year, as we have begun the commercialization stage of the Company, we continue to add to our talent base in important management positions and advisors, each with expertise in their respective fields, such as artificial intelligence, data analytics, digital health and wearables.

We may be at risk as a result of the current COVID-19 pandemic. Risks that could affect our business include the duration and scope of the COVID-19 pandemic and the impact on the demand for our products; actions by governments, businesses and individuals taken in response to the pandemic; the length of time of the COVID-19 pandemic and the possibility of its reoccurrence; the timing required to develop effective treatments and a vaccine in the event of future outbreaks; the eventual impact of the pandemic and actions taken in response to the pandemic on global and regional economies; and the pace of recovery when the COVID-19 pandemic subsides.

Critical Accounting Policies

This Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events, and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our consolidated financial statements are prepared. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. As applicable to the consolidated financial statements included elsewhere in this report, the most significant estimates and assumptions relate to determination of net realizable value of inventory.

13

Our significant accounting policies are discussed in Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included elsewhere in this report.

Results of Operations

The following discussion of our operating results explains material changes in our results of operations for the nine-month period ended September 30, 2020 compared with the same period ended September 30, 2019. The discussion should be read in conjunction with the financial statements and related notes included elsewhere in this report.

Nine Months ended September 30, 2020 compared to Nine Months ended September 30, 2019

Revenues

During the nine-month period ended September 30, 2020, we had revenues of $2,271 from orders for our GlucoTrack® model DF-F glucose monitoring device and PEC that are replaced every six months, as compared with $140,255 for the prior-year period due to a decrease in orders for our products.

We recognize revenues from sales of the GlucoTrack® model DF-F and PECs when control is transferred to the customer and collectability is probable.

Research and development expenses

Research and development expenses were $1,270,295 for the nine-month period ended September 30, 2020, as compared to $1,203,616 for the prior-year period. The increase is immaterial.

Research and development expenses consist primarily of salaries and other personnel-related expenses, including stock-based compensation expenses, materials, (including provision for slow inventory), travel expenses, clinical trials and other expenses. We expect research and development expenses to increase in 2020 and beyond, primarily due to hiring additional personnel and developing our product line, as well as improvement of the GlucoTrack® model DF-F; 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® models and others.

Selling and marketing expenses

Selling and marketing expenses were $274,183 for the nine-month period ended September 30, 2020, as compared to $444,555 for the prior-year period. The decrease is primarily attributable to the Company’s decision to reduce its business development personnel in the European market until such a time when the proof of concept of obtaining reimbursement for the product in test markets is realized.

Selling and marketing expenses consist primarily of professional services, salaries, travel expenses and other related expenses. We expect selling and marketing expenses to increase in 2020 and beyond as we continue our focus on marketing and sales of the GlucoTrack® model DF-F and potential FDA clinical trials.

General and administrative expenses

General and administrative expenses were $711,795 for the nine-month period ended September 30, 2020, as compared to $1,391,916 for the prior-year period. The decrease is primarily attributable to the departure of our former President and CFO, a reduction in professional fees and the reduction of stock based compensation during the last half of 2019.

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 and accounting services.

Financing income, net

Financing income, net was $98,978 for the nine-month period ended September 30, 2020, as compared to financing expenses of $17,455 for the prior-year period. For more information see Note 5 to the financial statements.

Net Loss

Net loss was $1,816,957 for the nine-month period ended September 30, 2020, as compared to $2,917,287 for the prior-year period. The decrease in net loss is attributable primarily to the decrease in our operating expenses, as described above.

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Three Months ended September 30, 2020 compared to Three Months ended September 30, 2019

Revenues

During the three-month period ended September 30, 2020, we had zero revenues from orders for our GlucoTrack® model DF-F glucose monitoring device and PEC that are replaced every six months, as compared with $4,175 for the prior-year period due to a decrease in orders for our products.

We recognize revenues from sales of the GlucoTrack® model DF-F and PECs when control is transferred to the customer and collectability is probable.

Research and development expenses

Research and development expenses were $476,364 for the three-month period ended September 30, 2020, as compared to $377,377 for the prior-year period. The increase is attributable to an increase in salary and other personnel-related expenses during 2020.

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 2020 and beyond, primarily due to hiring additional personnel and developing our product line, as well as improvement of the GlucoTrack® model DF-F; 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® models and others.

Selling and marketing expenses

Selling and marketing expenses were $93,366 for the three-month period ended September 30, 2020, as compared to $168,259 for the prior-year period. The decrease is primarily attributable to the Company’s decision to reduce its business development personnel in the European market until such a time when the proof of concept of obtaining reimbursement for the product in test markets is realized.

Selling and marketing expenses consist primarily of professional services, salaries, travel expenses and other related expenses. We expect selling and marketing expenses to increase in 2020 and beyond as we continue our focus on marketing and sales of the GlucoTrack® model DF-F and potential FDA clinical trials.

General and administrative expenses

General and administrative expenses were $317,597 for the three-month period ended September 30, 2020, as compared to $439,012 for the prior-year period. The decrease is primarily attributable to the departure of our former President and CFO, a reduction in professional fees and the reduction of stock based compensation during the last half of 2019.

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 and accounting services.

Financing income (expenses), net

Financing income, net was $40,245 for the three-month period ended September 30, 2020, as compared to financing expenses of $16,304 for the prior-year period. For more information see Note 5 to the financial statements.

Net Loss

Net loss was $509,015 for the three-month period ended September 30, 2020, as compared to $996,777 for the prior-year period. The decrease in net loss is attributable primarily to the decrease in our operating expenses, as described above.

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Liquidity and Capital Resources

As of September 30, 2020, cash on hand was approximately $10.7 million as a result of our $15 million private placement which closed during February 2020, for which we received net cash of approximately $13 million. Based on our current cash burn rate, strategy and operating plan, we believe that our cash and cash equivalents will enable us to operate for a period in excess of one year from the date of this report. In order to fund our anticipated liquidity needs beyond such period (or possibly earlier if our current cash burn rate, strategy or operating plan change in a way that accelerates or increases our liquidity needs), we will need to raise additional capital.

Messrs. Avner Gal and Zvi Cohen collectively loaned Integrity Israel NIS 176,000 ($51,764 based on the exchange rate of 3.4 NIS/dollar as of September 30, 2020) on May 15, 2002 pursuant to a board approval. Messrs. Nir Tarlovsky, Yitzhak Fisher and Asher Kugler loaned Integrity Israel NIS 336,300 ($98,912 based on the same exchange rate) on March 16, 2004. These loans are not required to be repaid until the first year in which we realize profits in our annual statement of operations (accounting profit). At such time, the loans are to be repaid on a quarterly basis in an amount equal to 10% of our total sales in the relevant quarter, beginning on the quarter following the first year in which we realize profits in our annual statement of operations. The total amount to be repaid by us to each lender shall be an amount equal to the aggregate principal amount loaned by such lender to us, plus an amount equal to the product of the amount of each payment made by us in respect of such loan multiplied by the percentage difference between the Israeli Consumer Price Index on the date on which the loan was made and the Israeli Consumer Price Index on the date of such payment. However, notwithstanding the above-mentioned mechanism, we will not be required to repay the loans during any time when such repayment would cause a deficit in our working capital. Our Board of Directors is entitled to modify the repayment terms of these loans, so long as such modification does not discriminate against any particular lender, and provided that all payments must be allocated among the lenders on a pro-rata basis.

Integrity Israel is required to pay royalties to the Office of the Chief Scientist of the Ministry of Industry, Trade and Labor of the State of Israel at a rate ranging between 3-5% of the proceeds from the sale of the Company’s products arising from the development plan up to an amount equal to $93,300, plus interest at LIBOR from the date of grant. As of September 30, 2020, the contingent liability with respect to royalty payment on future sales equaled approximately $34,000, excluding interest.

Net Cash Used in Operating Activities for the Nine-month Periods Ended September 30, 2020 and September 30, 2019

Net cash used in operating activities was $2,656,834 and $3,102,508 for the nine-month periods ended September 30, 2020 and 2019, respectively. Net cash used in operating activities primarily reflects the net loss for those periods of $1,816,957 and $2,917,287, respectively.

Net Cash Used in Investing Activities for the Nine-month Periods Ended September 30, 2020 and September 30, 2019

Net cash used in investing activities was $45,900 and $22,554 for the nine-month periods ended September 30, 2020 and 2019, respectively, and was used to purchase equipment (such as computers, research and development, and office equipment).

Net Cash Provided by Financing Activities for the Nine-month Periods Ended September 30, 2020 and September 30, 2019

Net cash provided by financing activities was $13,009,269 and $4,198,574 for the nine-month periods ended, September 30, 2020 and 2019, respectively. Cash provided by financing activities for the nine-month period ended September 30, 2020 reflected net capital raised from the February 2020 private placement and issuance of our common stock. Cash provided by financing activities for the nine-month period ended September 30, 2019, reflected net capital raised from the issuance of Series D Units.

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Off-Balance Sheet Arrangements

As of September 30, 2020, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not required for smaller reporting companies.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our President and Chief Operating Officer and our Interim Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2020. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2020, our President and Interim Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Offering of Series D Units

During 2019, the Company received aggregate gross proceeds of $4,873,520 from the private placement of its securities to accredited investors in a transaction exempt from registration under Section 4(a)(2) the Securities Act of 1933, as amended.

On June 14, 2019, Integrity Applications, Inc. (the “Company”) conducted a final closing of the private placement of its securities pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) with certain accredited investors (the “Purchasers”). Pursuant to the Purchase Agreements, on each of such closing dates, the Company issued to the respective Purchasers an aggregate of 13,972,100 units at a purchase price of $0.258 per unit of the Company (each a “Unit” and, collectively, the “Units”), each consisting of (a) one share (collectively, the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), (b) .05734 of a five year warrant to purchase, at an exercise price of $1.80 per share, one share of Common Stock (collectively, the “Series D-1 Warrants”), (c) .05734 of a five year warrant to purchase, at an exercise price of $3.60 per share, one share of Common Stock (collectively, the “Series D-2 Warrants”), and (d) .05734 of a five year warrant to purchase, at an exercise price of $5.40 per share, one share of Common Stock (collectively, the “Series D-3 Warrants”, and together with the Series D-1 Warrants and Series D-2 Warrants, the “Warrants”).

17

In the final closing, the Company received aggregate gross proceeds of $3,604,800 from the sale of the Units pursuant to the Purchase Agreements.

On February 14, 2020, we entered into a Securities Purchase Agreement and Registration Rights Agreement with an accredited investor, pursuant to which the accredited investor purchased 37,500,000 shares of the Company’s common stock, par value $0.001 per share, for an aggregate gross purchase price of $15,000,000. Our placement agent was paid $1,950,000 in fees in connection therewith and issued a warrant to purchase 3,750,000 shares to the placement agent with terms similar to the terms of the Placement Agent Warrants issued in 2019.

Placement Agent Compensation

Pursuant to a placement agent agreement (the “Placement Agent Agreement”) with the placement agent for the Offering (the “Placement Agent”), at the closing of the sale of the Units the Company paid the Placement Agent, as a commission, a cash amount equal to 10% of the aggregate sales price of the Series D Units sold in each closing, plus a non-accountable expense allowance equal to 3% of the aggregate sales price of the Series D Units sold in such closing. In addition, pursuant to the placement agent agreement, we were required to issue to the Placement Agent warrants to purchase up to such number of shares of Common Stock equal to 10% of the aggregate Shares sold in the Offering plus warrants equal to 10% of the total number of the Warrants issued to the Purchasers in the Offering (collectively, the “Placement Agent Warrants”). The terms of the Placement Agent Warrants were substantially similar to the Warrants except that the Placement Agent Warrants are exercisable on a cashless basis and include full ratchet anti-dilution protection. Andrew Garrett, Inc., which is controlled by one of our directors, Andrew Sycoff, received cash of $833,557 ($633,557 for Placement Agent fees and $200,000 for Advisory fees) and 2,213,881 warrants for Placement Agent fees in 2019 from us. In the first quarter of 2020, Andrew Garrett was paid $1,950,000 in fees in connection therewith, and issued a warrant to purchase 3,750,000 shares to the placement agent with terms similar to the terms of the Placement Agent Warrants issued in 2019.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

None

Item 6. Exhibits.

Exhibit No.	Description
2.1	Merger Agreement and Plan of Reorganization, dated as of May 25, 2010, by and among Integrity Applications, Inc., Integrity Acquisition Ltd. and A.D. Integrity Applications Ltd. (1)
3.1	Certificate of Incorporation of Integrity Applications, Inc. (1)
3.2	Certificate of Amendment to Certificate of Incorporation of Integrity Applications, Inc. (1)
3.3	Bylaws of Integrity Applications, Inc. (1)
10.1	Form of Securities Purchase Agreement dated February 14, 2020 (3)
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document (2)
101.SCH	XBRL Schema Document (2)
101.CAL	XBRL Calculation Linkbase Document (2)
101.LAB	XBRL Label Linkbase Document (2)
101.PRE	XBRL Presentation Linkbase Document (2)
101.DEF	XBRL Definition Linkbase Document (2)

(1)	Previously filed as an exhibit to the Company’s Registration Statement on Form S-1, as filed with the SEC on August 22, 2011, which exhibit is incorporated herein by reference.
(2)	Pursuant to Rule 402 of Regulation S-T, the interactive files on Exhibit 101 hereto are deemed not filed for purposes of Section 11 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under those sections, and are not part of any registration statement to which they relate.
(3)	Previously filed as an exhibit to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on May 19, 2020, which exhibit is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: November 12, 2020

INTEGRITY APPLICATIONS, INC.
By:	/s/ David Malka
Name:	David Malka
Title:	President (Principal Executive Officer)
By:	/s/ Jolie Kahn
Name:	Jolie Kahn
Title	Interim Chief Financial Officer
	(Principal Financial Officer)

19

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF

THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, David Malka, certify that:

1.	I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2020 of Integrity Applications, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 12, 2020	By:	/s/ David Malka
		David Malka
		Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF

THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Jolie Kahn, certify that:

1.	I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2020 of Integrity Applications, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 12, 2020	By:	/s/ Jolie Kahn
		Jolie Kahn
		Principal Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Integrity Applications, Inc. (the “Company”) for the period ended September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David Malka, Principal Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)	the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ David Malka
	David Malka
	Principal Executive Officer
Dated:	November 12, 2020

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Integrity Applications, Inc. (the “Company”) for the period ended September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jolie Kahn, Principal Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)	the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Jolie Kahn
	Jolie Kahn
	Principal Financial Officer
Dated:	November 12, 2020

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2020	Nov. 12, 2020
Cover [Abstract]
Entity Registrant Name	Integrity Applications, Inc.
Entity Central Index Key	0001506983
Document Type	10-Q
Document Period End Date	Sep. 30, 2020
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity's Reporting Status Current	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		200,669,064
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020

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Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Current Assets
Cash and cash equivalents	$ 10,706,646	$ 418,621
Accounts receivable, net	71,284	70,161
Inventory	280,672	184,602
Other current assets	55,587	44,658
Total current assets	11,114,189	718,042
Operating lease right-of-use assets, net	153,200	187,232
Property and equipment, net	147,791	133,795
Non-current Restricted Cash	57,653	57,092
TOTAL ASSETS	11,472,833	1,096,161
Current Liabilities
Accounts payable	842,928	1,534,078
Operating lease liabilities, current	136,457	142,090
Other current liabilities	339,200	596,087
Total Current Liabilities	1,318,585	2,272,255
Non-current Liabilities
Long-Term Loans from Stockholders	190,894	190,365
Operating lease liabilities, non-current	16,743	45,143
Total Non-current liabilities	207,637	235,508
Total Liabilities	1,526,222	2,507,763
Stockholders' Equity (Deficit)
Common Stock of $ 0.001 par value ("Common Stock"): 500,000,000 shares authorized; 200,669,064 and 161,858,436 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively	200,669	161,858
Additional paid-in capital	102,118,435	89,005,407
Receipts on account of shares	47,376
Accumulated other comprehensive income	100,017	124,062
Accumulated deficit	(92,519,886)	(90,702,929)
Total Stockholders' equity (deficit)	9,946,611	(1,411,602)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$ 11,472,833	$ 1,096,161

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	200,000,000
Common stock, shares issued	200,669,064	161,858,436
Common stock, shares outstanding	200,669,064	161,858,436

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Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Revenue		$ 4,175	$ 2,271	$ 140,255
Research and development	476,364	377,377	1,270,295	1,203,616
Selling and marketing expenses	93,366	168,259	274,183	444,555
General and administrative	317,597	439,012	711,795	1,391,916
Total operating expenses	887,327	984,648	2,256,273	3,040,087
Operating Loss	(887,327)	(980,473)	(2,254,002)	(2,899,832)
Other income	338,067		338,067
Finance Income (expense), net:	40,245	(16,304)	98,978	(17,455)
Net Loss	(509,015)	(996,777)	(1,816,957)	(2,917,287)
Other comprehensive expenses:
Foreign currency translation adjustment	(18,044)	(2,987)	(24,045)	(29,625)
Comprehensive loss for the period	$ (527,059)	$ (999,764)	$ (1,841,002)	$ (2,946,912)
Net Loss per Common Share
Basic	$ (0.00)	$ (0.01)	$ (0.01)	$ (0.01)
Diluted	$ (0.00)	$ (0.01)	$ (0.01)	$ (0.01)
Average number of common shares used in computing basic and diluted loss per share	200,537,588	162,012,688	194,312,810	152,240,776

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Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Receipt on Account of Shares [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2018	$ 141,638	$ 84,007,612		$ 164,232	$ (87,186,783)	$ (2,873,301)
Balance, shares at Dec. 31, 2018	141,634,700
Loss for the period					(2,917,287)	(2,917,287)
Other comprehensive loss				(29,625)		(29,625)
Amounts allocated to Series D-1, D-2 and Series D-3 Warrants, net		31,915				31,915
Amount allocated to issuance of Common Stock from Series D offering	$ 18,892	3,898,155				3,917,047
Amount allocated to issuance of Common Stock from Series D offering, shares	18,889,618
Issuance of shares as settlement of financial liabilities	$ 1,190	305,866				307,056
Issuance of shares as settlement of financial liabilities, shares	1,190,141
Warrants issued as consideration for placement agent services		249,612				249,612
Stock-based compensation	$ 351	451,416				451,767
Stock-based compensation, shares	348,840
Balance at Sep. 30, 2019	$ 162,071	88,944,576		134,607	(90,104,070)	(862,816)
Balance, shares at Sep. 30, 2019	162,063,299
Balance at Jun. 30, 2019	$ 161,955	88,823,095		137,594	(89,107,293)	15,351
Balance, shares at Jun. 30, 2019	161,947,019
Loss for the period					(996,777)	(996,777)
Other comprehensive loss				(2,987)		(2,987)
Stock-based compensation	$ 116	121,481				121,597
Stock-based compensation, shares	116,280
Balance at Sep. 30, 2019	$ 162,071	88,944,576		134,607	(90,104,070)	(862,816)
Balance, shares at Sep. 30, 2019	162,063,299
Balance at Dec. 31, 2019	$ 161,858	89,005,407		124,062	(90,702,928)	(1,411,602)
Balance, shares at Dec. 31, 2019	161,858,436
Loss for the period					(1,816,957)	(1,816,957)
Other comprehensive loss				(24,045)		(24,045)
Issuance of Common Stock, net	$ 37,500	12,215,682				12,253,182
Issuance of Common Stock, net, shares	37,500,000
Issuance of shares as settlement of financial liabilities	$ 1,311	119,581	47,376			168,268
Issuance of shares as settlement of financial liabilities, shares	1,310,628
Warrants issued as consideration for placement agent services		756,087				756,087
Stock-based compensation		21,678				21,678
Stock-based compensation, shares
Balance at Sep. 30, 2020	$ 200,669	102,118,435	47,376	100,017	(92,519,886)	9,946,611
Balance, shares at Sep. 30, 2020	200,669,064
Balance at Jun. 30, 2020	$ 200,525	102,052,553	62,086	118,061	(92,010,871)	10,422,354
Balance, shares at Jun. 30, 2020	200,525,066
Loss for the period					(509,015)	(509,015)
Other comprehensive loss				(18,044)		(18,044)
Issuance of shares as settlement of financial liabilities	$ 144	57,455	(14,710)			42,889
Issuance of shares as settlement of financial liabilities, shares	143,998
Stock-based compensation		8,427				8,427
Stock-based compensation, shares
Balance at Sep. 30, 2020	$ 200,669	$ 102,118,435	$ 47,376	$ 100,017	$ (92,519,886)	$ 9,946,611
Balance, shares at Sep. 30, 2020	200,669,064

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Condensed Consolidated Statements of Change in Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period	$ (1,816,957)	$ (2,917,287)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	35,391	38,253
Stock-based compensation	21,678	451,767
Linkage difference on principal of loans from stockholders	(1,335)	5,708
Changes in assets and liabilities:
Increase in accounts receivable	(437)	(5,777)
Decrease (increase) in inventory	(94,262)	43,140
Increase in other current assets	(10,604)	(23,566)
Decrease in accounts payable	(359,719)	(573,014)
Gain from settlement of liability to service provider	(338,067)
Decrease in other current liabilities	(92,522)	(121,732)
Net cash used in operating activities	(2,656,834)	(3,102,508)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(45,900)	(22,554)
Net cash used in investing activities	(45,900)	(22,554)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock, net of cash issuance expenses	13,009,269	4,165,079
Proceeds allocated to Series D Warrants, net of cash issuance expenses		33,495
Net cash provided by financing activities	13,009,269	4,198,574
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	(17,949)	55,708
Change in cash, cash equivalents, and restricted cash	10,288,586	1,129,220
Cash, cash equivalents, and restricted cash at beginning of the period	475,713	149,684
Cash, cash equivalents, and restricted cash, end of period	$ 10,764,299	$ 1,278,904

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Condensed Consolidated Statements of Change in Cash Flows (Unaudited) (Parenthetical) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Fair value of warrants issued as consideration for placement agent services	$ 756,087
Board Members and Management [Member]
Settlement of liability	$ 168,000	$ 307,000

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General

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

NOTE 1 – GENERAL

A.

Integrity Applications, Inc. (the “Company”) was incorporated on May 18, 2010 under the laws of the State of Delaware. On July 15, 2010, Integrity Acquisition Corp. Ltd. (hereinafter: “Integrity Acquisition”), a wholly owned Israeli subsidiary of the Company, which was established on May 23, 2010, completed a merger with A.D. Integrity Applications Ltd. (hereinafter: “Integrity Israel”), an Israeli corporation that was previously held by the stockholders of the Company. Pursuant to the merger, all equity holders of Integrity Israel received the same proportional ownership in the Company as they had in Integrity Israel prior to the merger. Following the merger, Integrity Israel became a wholly-owned subsidiary of the Company. As the merger transaction constituted a structural reorganization, the merger has been accounted for at historical cost in a manner similar to a pooling of interests. Integrity Israel was incorporated in 2001 and commenced its operations in 2002. Integrity Israel, a medical device company, focuses on the design, development and commercialization of non-invasive glucose monitoring devices for use by people with diabetes and prediabetes.

B.

Since its incorporation, the Company’s material operations have all been carried out by Integrity Israel. The development and commercialization of Integrity Israel’s product is expected to require substantial expenditures. The Company has not yet generated significant revenues from operations, and therefore they are dependent upon external sources for financing their operations. As of September 30, 2020, the Company has an accumulated deficit of $92,519,886. In addition, in each year since its inception, the Company reported losses from operations and negative cash flows from operating activities As described in Note 3, on February 14, 2020, the Company closed on a $15 million private placement of its common stock, for which it received net cash in excess of $13,009,269. As of September 30, 2020, the company has cash, cash equivalents and restricted cash in the amount of $10,764,299, which is expected to be sufficient to meet its capital needs for at least 12 months from the date of issuance of these financial statements, thus the Company is expected to be able to operate as a going concern for at least 12 months from the date hereof.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.	Basis of presentation
	Accounting Principles
	The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Securities and Exchange Commission (“SEC”) on April 14, 2020. The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC related to interim financial statements. As permitted under those rules, certain information and footnote disclosures normally required or included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are considered necessary to present fairly the results of the Company’s financial position and operating results for the interim periods. All such adjustments are of a normal recurring nature
	The results for the nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any other interim period or for any future period.
	Principles of Consolidation
	The consolidated financial statements include the accounts of the Company and its subsidiary. Significant intercompany balances and transactions have been eliminated in consolidation.
	Loss Per Share
	The Company computes net loss per share in accordance with ASC 260, “Earnings per share”. Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, net of the weighted average number of treasury shares (if any).
	Diluted loss per common share is computed similar to basic loss per share, except that the denominator is increased to include the number of additional potential shares of common stock that would have been outstanding if the potential shares of common stock had been issued and if the additional shares of common stock were dilutive. Potential shares of common stock are excluded from the computation for a period in which a net loss is reported or if their effect is anti-dilutive.
	An amount of 81,346,964 and 78,900,534 weighted average outstanding stock options and stock warrants have been excluded from the calculation of the diluted net loss per share for the period of nine months ended September 30, 2020 and 2019, respectively, because the effect of the common shares issuable as a result of the exercise or conversion of these instruments was determined to be anti-dilutive.
	An amount of 83,518,512 and 81,527,505 weighted average outstanding stock options and stock warrants have been excluded from the calculation of the diluted net loss per share for the period of three Months ended September 30, 2020 and 2019, respectively, because the effect of the common shares issuable as a result of the exercise or conversion of these instruments was determined to be anti-dilutive.

B. Use of estimates in the preparation of financial statements

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to determination of net realizable value of inventory.

C. Reclassified Amounts

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications did not have material effect on the reported results of operations, shareholder’s equity or cash flows.

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Recent Events

9 Months Ended

Sep. 30, 2020

Recent Events

Recent Events

NOTE 3 – RECENT EVENTS

A.	On January 21, 2020, the Company announced that it has received CE Mark approval for a major enhancement to GlucoTrack, allowing for a user to perform the calibration process by themselves, without the need for a certified calibrator. The initial CE Mark approval received for GlucoTrack required a calibration process that took three hours to complete, required eight invasive finger stick reference measurements, needed to be repeated every thirty days and required a certified calibrator to perform the calibration. After a series of successful enhancements and approvals, the calibration process now takes just thirty minutes, requires just three invasive reference measurements, and needs to be repeated only once every nine months. With self-calibration, a user can now perform this simplified process in the privacy and convenience of their own home.
B.	On February 14, 2020, the Company entered into a Securities Purchase Agreement and Registration Rights Agreement (collectively, the “Agreements”) with an accredited investor, pursuant to which the accredited investor purchased 37,500,000 shares of the Company’s common stock, par value $0.001 per share, for an aggregate gross purchase price of $15,000,000. The Company received net proceeds of $13,009,269 after payment of fees to its placement agent and legal and accounting fees.
	In connection with the agreement, the Company’s placement agent was paid $1,950,000 in fees in connection therewith, and issued five years warrant to purchase 3,750,000 shares at an exercise price per share of $0.40 with terms similar to the terms of the Placement Agent Warrants issued in 2019. The fair value of the warrants as of the agreement date was $756,087.
C.	The Company may be at risk as a result of the current COVID-19 pandemic. Risks that could affect its business include the duration and scope of the COVID-19 pandemic and the impact on the demand for its products; actions by governments, businesses and individuals taken in response to the pandemic; the length of time of the COVID-19 pandemic and the possibility of its reoccurrence; the timing required to develop effective treatments and a vaccine in the event of future outbreaks; the eventual impact of the pandemic and actions taken in response to the pandemic on global and regional economies; and the pace of recovery when the COVID-19 pandemic subsides.

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Leases

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

NOTE 4 – LEASES

The Company has entered into several non-cancellable operating lease agreements for the Company’s offices and three vehicles. the Company’s leases have original lease periods expiring between 2020 and 2022. Payments due under such lease contracts include primarily fix payments. the Company does not assume renewals in its determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. the company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The components of lease costs, lease term and discount rate are as follows:

	US dollars
	Nine Months Ended
	September 30, 2020
		(unaudited)
Operating lease cost:
Office space		89,009
Vehicles		29,204
		118,213
Remaining Lease Term
Office space		0.92 years
Vehicles		1.64 years
Weighted Average Discount Rate
Office space		10	%
Vehicles		10	%

The following is a schedule, by years, of maturities of operating lease liabilities as of September 30, 2020:

	US dollars
	September 30, 2020
		(unaudited)
Period:
The remainder of 2020		45,842
2021		104,552
2022		11,119
Total operating lease payments		161,513
Less: imputed interest		8,313
Present value of lease liabilities		153,200

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Financing Income (Expenses), Net

9 Months Ended

Sep. 30, 2020

Other Income and Expenses [Abstract]

Financing Income (Expenses), Net

NOTE 5 – FINANCING INCOME (EXPENSES), NET

	US dollars						US dollars
	Nine-month period ended September 30,						Three-month period ended September 30,
	2020			2019			2020			2019
	(Unaudited)						(Unaudited)
Israeli CPI linkage difference on principal of loans from stockholders		1,335			(5,708	)		(171	)		(1,843	)
Exchange rate differences		(4,499	)		1,808			2,020			(8,761	)
Interest income on credit in bank		105,072			-			47,833			-
Others		(2,930	)		(13,555	)		(9,437	)		(5,700	)
		98,978			(17,455	)		40,245			(16,304	)

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Basis of Presentation

A.	Basis of presentation
	Accounting Principles
	The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Securities and Exchange Commission (“SEC”) on April 14, 2020. The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC related to interim financial statements. As permitted under those rules, certain information and footnote disclosures normally required or included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are considered necessary to present fairly the results of the Company’s financial position and operating results for the interim periods. All such adjustments are of a normal recurring nature
	The results for the nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any other interim period or for any future period.
	Principles of Consolidation
	The consolidated financial statements include the accounts of the Company and its subsidiary. Significant intercompany balances and transactions have been eliminated in consolidation.
	Loss Per Share
	The Company computes net loss per share in accordance with ASC 260, “Earnings per share”. Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, net of the weighted average number of treasury shares (if any).
	Diluted loss per common share is computed similar to basic loss per share, except that the denominator is increased to include the number of additional potential shares of common stock that would have been outstanding if the potential shares of common stock had been issued and if the additional shares of common stock were dilutive. Potential shares of common stock are excluded from the computation for a period in which a net loss is reported or if their effect is anti-dilutive.
	An amount of 81,346,964 and 78,900,534 weighted average outstanding stock options and stock warrants have been excluded from the calculation of the diluted net loss per share for the period of nine months ended September 30, 2020 and 2019, respectively, because the effect of the common shares issuable as a result of the exercise or conversion of these instruments was determined to be anti-dilutive.
	An amount of 83,518,512 and 81,527,505 weighted average outstanding stock options and stock warrants have been excluded from the calculation of the diluted net loss per share for the period of three Months ended September 30, 2020 and 2019, respectively, because the effect of the common shares issuable as a result of the exercise or conversion of these instruments was determined to be anti-dilutive.

Use of Estimates in the Preparation of Financial Statements

B. Use of estimates in the preparation of financial statements

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to determination of net realizable value of inventory.

Reclassified Amounts

C. Reclassified Amounts

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications did not have material effect on the reported results of operations, shareholder’s equity or cash flows.

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Leases (Tables)

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Schedule of Lease Costs, Lease Term and Discount

The components of lease costs, lease term and discount rate are as follows:

	US dollars
	Nine Months Ended
	September 30, 2020
		(unaudited)
Operating lease cost:
Office space		89,009
Vehicles		29,204
		118,213
Remaining Lease Term
Office space		0.92 years
Vehicles		1.64 years
Weighted Average Discount Rate
Office space		10	%
Vehicles		10	%

Schedule of Operating Lease Maturity Payments

The following is a schedule, by years, of maturities of operating lease liabilities as of September 30, 2020:

	US dollars
	September 30, 2020
		(unaudited)
Period:
The remainder of 2020		45,842
2021		104,552
2022		11,119
Total operating lease payments		161,513
Less: imputed interest		8,313
Present value of lease liabilities		153,200

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Financing Income (Expenses), Net (Tables)

9 Months Ended

Sep. 30, 2020

Other Income and Expenses [Abstract]

Schedule of Financing Income (Expenses), Net

	US dollars						US dollars
	Nine-month period ended September 30,						Three-month period ended September 30,
	2020			2019			2020			2019
	(Unaudited)						(Unaudited)
Israeli CPI linkage difference on principal of loans from stockholders		1,335			(5,708	)		(171	)		(1,843	)
Exchange rate differences		(4,499	)		1,808			2,020			(8,761	)
Interest income on credit in bank		105,072			-			47,833			-
Others		(2,930	)		(13,555	)		(9,437	)		(5,700	)
		98,978			(17,455	)		40,245			(16,304	)

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General (Details Narrative) - USD ($)	Feb. 14, 2020	Sep. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit		$ (92,519,886)	$ (90,702,929)
Proceeds from issuance of private placement	$ 15,000,000
Excess of cash received, net	$ 13,009,269
Cash, cash equivalents and restricted cash		$ 10,764,299	$ 475,713	$ 1,278,904	$ 149,684

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Summary of Significant Accounting Policies (Details Narrative) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Accounting Policies [Abstract]
Diluted net loss per share	83,518,512	81,527,505	81,346,964	78,900,534

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Recent Events (Details Narrative) - USD ($)		9 Months Ended	12 Months Ended
	Feb. 14, 2020	Sep. 30, 2020	Dec. 31, 2019
Common stock par value		$ 0.001	$ 0.001
Number of common stock issued, value		$ 12,253,182
Proceeds from private placement	$ 15,000,000
Securities Purchase Agreement and Registration Rights Agreement [Member] | Accredited Investor [Member]
Number of common stock issued	37,500,000
Common stock par value	$ 0.001
Number of common stock issued, value	$ 15,000,000
Securities Purchase Agreement and Registration Rights Agreement [Member] | Placement Agent [Member]
Proceeds from private placement	$ 13,009,269
Placement agent fees
Warrant term			5 years
Warrant to purchase of common stock			3,750,000
Warrant exercise price per share			$ 0.40
Fair value of warrant

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Leases - Schedule of Lease Costs, Lease Term and Discount (Details)	9 Months Ended
	Sep. 30, 2020 USD ($)
Operating lease cost	$ 118,213
Office Space [Member]
Operating lease cost	$ 89,009
Remaining Lease Term	11 months 1 day
Weighted Average Discount Rate	10.00%
Vehicles [Member]
Operating lease cost	$ 29,204
Remaining Lease Term	1 year 7 months 21 days
Weighted Average Discount Rate	10.00%

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Leases - Schedule of Operating Lease Maturity Payments (Details)	Sep. 30, 2020 USD ($)
Leases [Abstract]
The remainder of 2020	$ 45,842
2021	104,552
2022	11,119
Total operating lease payments	161,513
Less: imputed interest	8,313
Present value of lease liabilities	$ 153,200

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Financing Income (Expenses), Net - Schedule of Financing Income (Expenses), Net (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Other Income and Expenses [Abstract]
Israeli CPI linkage difference on principal of loans from stockholders	$ (171)	$ (1,843)	$ 1,335	$ (5,708)
Exchange rate differences	2,020	(8,761)	(4,499)	1,808
Interest income on credit in bank	47,833		105,072
Others	(9,437)	(5,700)	(2,930)	(13,555)
Financing income (expenses), net	$ 40,245	$ (16,304)	$ 98,978	$ (17,455)