ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking Statements

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws and is subject to the safe harbor created by such Act and laws. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms, or other variations thereon or comparable terminology. The statements herein and their implications are merely predictions and therefore inherently subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause actual results, performance levels of activity, or our achievements, or industry results to be materially different from those contemplated by the forward-looking statements. Except as required by law, we undertake no obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Further information on potential factors that could affect our business is described under the heading “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2024, as filed with the Securities and Exchange Commission, or the SEC, on April 4, 2025. As used in this quarterly report, the terms “we”, “us”, “our”, the “Company” and “IR-Med” mean IR-Med, Inc. and our wholly owned subsidiary IR. Med Ltd. unless otherwise indicated or as otherwise required by the context.

Overview

We are in the process of developing point-of-care decision support devices based on the patented cutting-edge infrared spectroscopy and artificial intelligence, or AI, analysis technology platform, as a basis for point-of-care decision support devices. The electrooptic visual and infrared spectroscopy technology platform allows harmless and non-invasive gathering of bio-information from a patient’s blood and tissue. Bioinformation is then analyzed using our AI-based algorithms to provide healthcare professionals with decision support in the assessment and monitoring of various disease conditions. We plan to use our proceeds to continue development efforts of our products, while mainly focusing on the DiaSafe™ device, production and marketing of PressureSafe™: commercial units, and working capital.

PressureSafe™: Our first product based on this platform, is a handheld device designed to revolutionize the early assessment of pressure injuries, or PIs, affecting the skin and underlying tissue. PIs in the U.S. alone account for $26.8 billion in healthcare spending and result in 60,000 deaths annually. PressureSafe™ is expected to contribute to early assessment of PIs, regardless of patient skin tone, which we believe will drive equitable healthcare and help reduce the toll and cost of PIs. We plan to launch PressureSafe™ as a decision support system, or DSS, tool for caregivers in hospitals, nursing homes, and home-care companies. On April 9, 2024, the PressureSafe™ decision support device received U.S. Food and Drug Administration, or FDA, listing certification. PressureSafe™ is classified as a Class I device and is exempt from 510(k) premarket submission. We are currently working on completing the development of the commercial version of the PressureSafe™ device, with initial pilots planned in the last quarter of 2025, following the listing by the FDA.

DiaSafe: Similarities in the physiological development of PIs and diabetic foot ulcers, or DFU, under the skin surface allow the IRMED PressureSafe™ device to be adopted to support the early assessment of DFU among diabetic patients at high risk of developing DFU. We are assessing and planning the development of our second product, which is a handheld optical monitoring device that will support early assessment of DFUs in lower limb skin and underlying tissue, primarily caused by prolonged pressure on the sole of diabetic patients, which sometimes is accompanied by other comorbidities as lower limb neuropathy.

Our novel technology platform will enable direct assessment of the development of a DFU before it becomes an open wound that may lead to limb amputation. The Israeli Innovation Authority, or IIA, has approved our plan to develop a diabetic foot ulcer device for early assessment of DFU. On January 25, 2024, the IIA approved a program to develop a device for the early assessment of diabetic foot ulcers among diabetic patients, with a project budget of NIS 3,761,978 (approximately US$ 1,030,000) which includes an amount equal to 50% grant of the total budget provided at the time of the grant, disbursed in installments over the course of 13 months, by the project’s progress. In consideration for the grant by the IIA, the subsidiary is required to pay royalties at the rate of 3%-5% from the total sales until the repayment date of the full amount of the grant, plus annual interest at the SOFR rate. In addition, the IIA must approve any arrangement whereby the Company seeks to transfer the technology relating to the project, or its development, from Israel. Following the IIA grant we plan to commence a clinical trial in the center of Israel’s leading diabetes clinic. On July 15, 2024, we announced that we received a grant from the IIA in the amount of approximately $500,000, to develop our platform technology for a new indication, a decision support device for the early assessment of diabetic foot ulcers. The grant’s 13-month development was finalized, as we achieved the project’s milestones. Computer simulations of infrared light reflectance from lesions under the skin surface have been completed. On April 6, 2025, the Company received an amount of NIS 644,551 (approximately $171,468), as an advance payment from the Israeli Innovation Authority (the “IIA”) to fund the development of a device for the assessment of diabetic foot ulcers before skin breakage among diabetic patients. The IIA approved the Company’s program with a total budget of NIS 4,603,938 (approximately $1,222,786), which includes a grant of 40% or NIS 1,841,575 (approximately $489,035). The IIA grant will be distributed in tranches based on specific milestones and the progress of the product development, from January 1, 2025 to December 31, 2025. In consideration of the grant by the IIA, the Subsidiary is required to pay royalties at the rate of 3%-5% from the total sales until the repayment date of the full amount of the grant, plus annual interest at the SOFR rate. In addition, the IIA must approve any arrangement whereby the Subsidiary seeks to transfer the technology relating to the project, or its development, from Israel.

Future indication as part of our research and development is an innovative otoscope, Nobiotics, to support physicians with an immediate indication as to whether mid-ear infection (otitis media), a common malady in children, is of a bacterial origin and thus requiring antibiotic treatment, or of a viral origin that consequently does not require antibiotic treatment.

Our technology platform utilizes AI. AI is a broad term generally used to describe conditions where a machine mimics “cognitive” functions associated with human intelligence, such as “learning” and “problem-solving.” Basic AI includes machine learning, where a machine uses algorithms to parse data, learn from it, and then suggest a determination or prediction about a given phenomenon. The machine is “trained” using large amounts of data and algorithms that provide it with the ability to learn how to perform various tasks.

The global diagnostics market is driven in large by solutions that can be applied in healthcare settings, as these tools will drive decisions regarding specific treatments and the associated outlays. However, despite advances in medical imaging and other diagnostic tools, misdiagnosis remains a common occurrence.

Our initial focus is on the development of decision support system solutions utilizing our proprietary platform for the pre-emptive diagnosis of PIs, and diabetic foot ulcers. Our current business plan focuses on two principal medical devices:

Recent Developments

Israeli Innovation Authority

On April 6, 2025, we received an amount of NIS 644,551 (approximately $171,468), as an advance payment from the IIA to fund the development of a device for the assessment of diabetic foot ulcers before skin breakage among diabetic patients. The IIA approved a total budget in a total amount of NIS 4,603,938 (approximately $1,222,786), which includes a grant of 40% or NIS 1,841,575 (approximately $489,035). The IIA grant will be distributed in tranches based on specific milestones and the progress of product development, from January 1, 2025 to December 31, 2025. The approval of the research and development project by the IIA is subject to the provisions of the Encouragement of Industrial Research and Development Law, 5744-1984 (the “Innovation Law”), as well as the rules, procedures, and guidelines established by the IIA. Pursuant to the terms of the grant, we are required to comply with all applicable regulatory and reporting obligations, including limitations relating to intellectual property and changes in ownership or control. In addition, the Company is obligated to pay royalties to the IIA for revenues generated in connection with the approved project, in accordance with the terms set forth in the grant approval and the Innovation Law.

June 2025 Private Placement

On June 5, 2025, we entered into a Securities Purchase Agreement, or the June 2025 Purchase Agreement with certain investors, each an Investor and, collectively, the Investors, pursuant to which we agreed to issue and sell, in a private placement offering, or the Offering, 591,187 shares of our common stock, par value $0.001 per share, or the Common Stock, at a per share price of $0.15, for aggregate gross proceeds of $88,678. The Offering closed on June 9, 2024.

Williamsburg Venture Holdings Equity Purchase Agreement

As previously reported, we entered into an Equity Purchase Agreement, or the Equity Purchase Agreement, with Williamsburg Venture Holdings, LLC, or Williamsburg, on March 11, 2025, pursuant to which Williamsburg agreed to invest up to Fifteen Million Dollars ($15,000,000) over a 24-month period.

On May 30, 2025, pursuant to the terms of the Equity Purchase Agreement, we delivered a duly executed put notice to Williamsburg, relating to the sale of 4,629,630 shares of our Common Stock, at a per share price of $0.108, for an aggregate purchase price of $500,000. We fulfilled our obligations pursuant to the terms of the Equity Purchase Agreement, including the timely delivery of the put shares. To date, Williamsburg has failed to remit the required $500,000 owed pursuant to the terms of the Agreement.

We have made multiple attempts to contact Mr. Ronald Glenn, the Managing Member of Williamsburg, with respect to Williamsburg’s failure to timely deliver the payment for the put shares, but to date has not yet received a response. We will continue to seek payment for the put shares from Williamsburg and intend to pursue any legal means available to it to enforce the terms of the Equity Purchase Agreement.

Amendment to Employment Agreements

On July 23, 2025, we entered into a second amendment to the employment agreement with Mr. Sharon Levkoviz, the Company’s Chief Financial Officer, or the Amendment. Pursuant to the terms of the Amendment, the monthly salary of Mr. Levkoviz will be reduced to NIS 7,500 (approximately $2,200) and he will no longer be entitled to the benefit of a leased car or any related payment allowances starting August 1, 2025. In addition, Mr. Levkoviz’s scope of employment will be reduced to 25% of his time as of August 1, 2025. All other terms related to Mr. Levkoviz’s overall compensation and equity-based awards remain unchanged.

On August 3, 2025, we provided a notice of termination of employment to Aharon Binur, pursuant to which he will cease serving as our Chief Development Officer effective August 31, 2025. The termination of Mr. Binur was not related to any disagreement with us on any matter relating to our operations, policies, or practices.

Results of Operations

Comparison of the six months ended June 30, 2025 to the six months ended June 30, 2024

Revenues. During the six-month period ended June 30, 2025 and 2024, we did not record any revenues from operations.

Research and Development Expenses, Net. Research and development expenses, net consist of salaries and related expenses, consulting fees, service provider costs, and overhead expenses less grants received. Research and development expenses, net decreased from $289,000 during the six months ended June 30, 2024 to $114,000 during the corresponding six month period in 2025. The decrease in the 2025 period resulted primarily from a decrease in the use of third-party contractors for further research and development activities due to the completion of the development of the PressureSafe™ device and the measures we implemented to cut our costs in response to our cash flow situation, a reduction in payroll expenses, partly offset due to decrease in IIA grants due to completion of funded project.

Marketing Expenses. Marketing expenses consist primarily of salaries and professional services. Marketing expenses decreased from $196,000 during the six months ended June 30, 2024 to $3,000 during the corresponding six month period in 2025. The decrease in marketing expenses resulted primarily from the reduction in non-cash expenses attributable to stock-based compensation granted to service providers.

General and Administrative Expenses. General and administrative expenses consist primarily of salaries and related expenses and other non-personnel related expenses, such as legal and accounting related expenses. General and administrative expenses decreased from $531,000 during the six months ended June 30, 2024 to $422,000 in the corresponding six months period in 2025. The decrease in general and administrative expenses resulted primarily from a reduction in payroll expenses, and a reduction in fees for professional services following the cost-cutting measures we undertook as a response to our current cash flow limitations, partially offset by an increase in non-cash expenses recorded relating to stock-based compensation to an employee.

Financial Expenses, Net. Financial expenses consist of non-cash expenses relating to shares issued under the equity purchase agreement, interest expenses on loans, changes in the fair value of derivative instruments, bank fees, and foreign exchange gains or losses. Financial expenses, net increased from $7,000 during the six months ended June 30, 2024, to $935,000 in the corresponding six-month period in 2025. This increase was primarily due to the recognition of non-cash expenses relating to shares issued related to the equity purchase agreement.

Loss. Loss for the six months ended June 30, 2024 was $1,023,000 compared to $1,474,000 for the corresponding six month period in 2025. The increase in net loss is primarily attributable to the increase in non-cash expenses recorded relating to shares issued related to the equity purchase agreement, partially offset by a reduction in payroll expenses, and a decrease in the use of third-party contractors for further research and development activities due to the completion of the development of the PressureSafe™ device and a reduction in fees for professional services following the cost-cutting measures we undertook as a response to our current cash flow limitations.

Comparison of the three months ended June 30, 2025 to the three months ended June 30, 2024

Revenues. During the three-month period ended June 30, 2025 and 2024, we did not record any revenues from operations.

Research and Development Expenses. Research and development expenses consist of salaries and related expenses, consulting fees, service provider costs, and overhead expenses. Research and development expenses decreased from $94,000 during the three months ended June 30, 2024 to $91,000 during the corresponding three month period in 2025. The decrease in the 2024 period resulted primarily from a decrease in the use of third-party contractors for further research and development activities due to the completion of the development of the PressureSafe™ device and the measures we implemented to cut our costs in response to our cash flow situation, a reduction in payroll expenses, offset due to decrease in IIA grants due to completion of funded project.

Marketing Expenses. Marketing expenses consist primarily of salaries and professional services. Marketing expenses decreased from $28,000 during the three months ended June 30, 2024 to $1,000 during the corresponding three month period in 2025. The decrease in marketing expenses resulted primarily from the reduction in non-cash expenses attributable to stock-based compensation granted to service providers.

General and Administrative Expenses. General and administrative expenses consist primarily of salaries and related expenses and other non-personnel related expenses, such as legal and accounting related expenses. General and administrative expenses decreased from $236,000 during the three months ended June 30, 2024 to $194,000 in the corresponding three month period in 2025. The decrease in general and administrative expenses resulted primarily from a reduction in payroll expenses and a reduction in fees for professional services following the cost-cutting measures we undertook as a response to our current cash flow limitations. partially offset by an increase in non-cash expenses recorded relating to stock-based compensation to an employee.

Financial Expenses, Net. Financial expenses consist of on cash expenses relating to shares issued under the equity purchase agreement, interest expenses on loans, changes in the fair value of derivative instruments, bank fees, and foreign exchange gains or losses. Financial expenses, net increased from $8,000 during the three months ended June 30, 2024, to $415,000 in the corresponding three-month period in 2025. This increase was primarily due to the recognition of non-cash expenses relating to shares issued related to the equity purchase agreement.

Loss. Loss for the three months ended June 30, 2024 was $366,000 compared to $701,000 for the corresponding three month period in 2025. The increase in net loss is primarily attributable to the increase in non-cash expenses recorded relating to shares issued related to the equity purchase agreement and the decrease in IIA grants due to the completion of funded project. partly offset due to the decrease in payroll expenses, and a decrease in the use of third-party contractors for further research and development activities due to the completion of the development of the PressureSafe™ device and a reduction in fees for professional services following the cost-cutting measures we undertook as a response to our current cash flow limitations and a decrease in non-cash expenses recorded relating to stock-based compensation to an employee and service providers.

Financial Condition, Liquidity and Capital Resources

We are subject to risks common to companies in the medical device industry, including but not limited to, the need for additional capital, the need to obtain marketing approval and reimbursement for any product candidate that we may identify and develop, the need to successfully commercialize and gain market acceptance of our product candidates, dependence on key personnel, protection of proprietary technology, compliance with government regulations, development of technological innovations by competitors, reliance on third-party manufacturers and the ability to transition from pilot-scale production to large-scale manufacturing of products.

From inception, we have funded our operations from a combination of loans and sales of equity instruments. In 2022 and 2023, we raised aggregate gross proceeds of $3,625,000 and $1,000,000, respectively, from sales of our equity and equity linked securities. In addition, on June 4, 2024 and July 4, 2024, we raised aggregate gross proceeds of $755,000 from sales of our shares of common stock and warrants to purchase shares of common stock. On June 9, 2025, we raised aggregate gross proceeds of $88,678 from the sales of our shares of common stock.

As of June 30, 2025, we had $63,000 in cash resources and approximately $800,000 of liabilities, including $774,000 of current liabilities.

The following table provides a summary of operating, investing, and financing cash flows for the six months ended June 30, 2024 and 2025 (in thousands):

We have experienced operating losses since inception and had a total accumulated deficit of $18,212 thousand as of June 30, 2025. We expect to incur additional costs and will require additional capital to realize our business plans. These losses have resulted from significant cash expenditures used in operations. During the six months ended June 30, 2025 and 2024, our cash used in operations was approximately $181,000 and $730,000, respectively. As we continue to conduct our business activities, we expect that the cash needed to fund our operations will increase significantly over the next several years, as we will need to continue and intensify our research and development efforts for our product candidates (which are in various stages of development), strengthen our patent portfolio, establish operations processes, and pursue FDA clearance and international regulatory approvals.

Effective March 26, 2025, we entered into a Note Purchase Agreement, or the Purchase Agreement, with Mr. Ran Ziskind, Mr. Yaniv Cohen, and Mr. Oded Bashan for an aggregate amount of $31,200. Pursuant to the Purchase Agreement, we issued unsecured convertible promissory notes, or the Notes, to Mr. Ziskind, Mr. Cohen, and Mr. Bashan in the principal amount of $10,400 for each Note. The Notes bear simple interest at a rate of 9% per annum and mature on the earlier of (i) March 26, 2026, or (ii) upon the completion by us of an equity or debt financing generating gross proceeds of at least $100,000. The Notes are convertible, at the election of the holder, on the maturity date into our shares of common stock at a price per share equal to 85% of the closing price of the common stock on the applicable trading market as of the maturity date. The Notes are subject to customary events of default, upon which the outstanding principal and accrued interest may become immediately due and payable. We may not prepay the principal amount without the consent of a majority of the holders of all outstanding Notes, though accrued interest may be paid at any time.

On June 5, 2025, we entered into the June 2025 Purchase Agreement with certain Investors pursuant to which we agreed to issue and sell, in a private placement offering, or the Offering, 591,187 shares of our common stock, par value $0.001 per share, or the Common Stock, at a per share price of $0.15, for aggregate gross proceeds of $88,678. The Offering closed on June 9, 2024.

As previously reported, we entered into an Equity Purchase Agreement, or the Equity Purchase Agreement, with Williamsburg Venture Holdings, LLC, or Williamsburg, on March 11, 2025, pursuant to which Williamsburg agreed to invest up to Fifteen Million Dollars ($15,000,000) over a 24-month period.

On May 30, 2025, pursuant to the terms of the Equity Purchase Agreement, we delivered a duly executed put notice to Williamsburg, relating to the sale of 4,629,630 shares of our Common Stock, at a per share price of $0.108, for an aggregate purchase price of $500,000. We fulfilled our obligations pursuant to the terms of the Equity Purchase Agreement, including the timely delivery of the put shares. To date, Williamsburg has failed to remit the required $500,000 owed pursuant to the terms of the Agreement.

We have made multiple attempts to contact Mr. Ronald Glenn, the Managing Member of Williamsburg, with respect to Williamsburg’s failure to timely deliver the payment for the put shares, but to date has not yet received a response. We will continue to seek payment for the put shares from Williamsburg and intend to pursue any legal means available to it to enforce the terms of the Equity Purchase Agreement.

We need to obtain additional funding in order to pursue our business plans. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

We expect that our existing cash and cash equivalents will enable us to fund our operations and capital expenditure requirements through the third quarter of 2025. Our requirements for additional capital during this period will depend on many factors, including the following:

For the six months ended June 30, 2025, and as of the date of this report, we assessed our financial condition and concluded that based on our current and projected cash resources and commitments, as well as other factors mentioned above, there is a substantial doubt about our ability to continue as a going concern. We are planning to raise additional capital to continue our operations, as well as to explore additional avenues to increase revenues and reduce expenditures. We cannot be sure that future funding will be available to us on acceptable terms, or at all. Due to the often-volatile nature of financial markets, equity and debt financing may be difficult to obtain.

We may seek to raise any necessary additional capital through a combination of private or public equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. To the extent that we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights, future revenue streams, or product candidates or to grant licenses on terms that may not be favorable to us. If we raise additional capital through private or public equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.