Preferred Stock and Warrant Issuance

On June 22, 2017, Integrity Applications, Inc., a Delaware
corporation (the “Company“), entered into a Securities
Purchase Agreement (the “Purchase Agreement“) with
certain accredited investors (the “Purchasers“) to
which, on June 22, 2017, the Company issued to the Purchasers an
aggregate of 660 units of the Company (each a “Unit”
and, collectively, the “Units“), each consisting of (a)
one share of the Company’s Series C 5.5% Convertible Preferred
Stock, par value $0.001 per share (the “Preferred
Stock“), convertible into shares of the Company’s common
stock, par value $0.001 per share (the “Common Stock“),
at an initial conversion price of $4.50 per share, (b) a five
year warrant to purchase, at an exercise price of $4.50 per
share, up to such number of shares of Common Stock equal to 100%
of the shares of Common Stock issuable upon conversion of such
share of Preferred Stock (each a “Series C-1 Warrant“)
and (c) a five year warrant to purchase, at an exercise price of
$7.75 per share, up to such number of shares of Common Stock
equal to 100% of the shares of Common Stock issuable upon
conversion of such share of Preferred Stock (each a “Series
C-2 Warrant” and, together with the Series C-1 Warrants,
collectively, the “Warrants“). The shares of Preferred
Stock comprising the Units are convertible into an aggregate of
146,675 shares of Common Stock, and the Warrants comprising the
Units are exercisable for an aggregate of 293,350 shares of
Common Stock, in each case subject to certain adjustments. The
Company received aggregate gross proceeds of $660,000 from the
sale of the Units to the Purchase Agreement.

The sale of the Units to the Purchase Agreement was the eleventh
closing of an offering of Units by the Company. The first,
second, third, fourth, fifth, sixth, seventh, eighth, ninth and
tenth closings, involving the sale by the Company of an aggregate
of 1,133 Units, 1,351 Units, 890.5 Units, 1,050.65 Units, 540
Units, 357.75 Units, 506 Units, 403.9 Units, 2,560 Units and
1,551 Units, respectively (collectively, the “Prior
Issuances“), were disclosed by the Company in Current
Reports on Form 8-K filed by the Company with the Securities and
Exchange Commission (the “SEC“) on April 14, 2016, May
4, 2016, June 6, 2016, July 7, 2016, September 7, 2016, October
7, 2016, December 5, 2016, January 5, 2017, March 14, 2017 and
May 3, 2017, respectively (collectively, the “Prior
8-Ks“), each of which is incorporated herein by reference.
The terms of the Preferred Stock and the Warrants are the same as
the terms of the Preferred Stock and Warrants issued in the Prior
Issuances, as described in the Prior 8-Ks.

Registration Rights

In connection with the sale of the Units, the Company entered
into a Registration Rights Agreement with the Purchasers, which
is substantially identical to the registration rights agreement
entered into with the prior purchasers in connection with the
Prior Issuances as disclosed in the Prior 8-Ks.

Placement Agent Compensation

to a placement agent agreement (the “Placement Agent
Agreement“) with the placement agent for the offering of the
Units (the “Placement Agent“), at the closing of the
sale of the Units the Company paid the Placement Agent, as a
commission, an amount (payable in cash and Common Stock) equal to
10% of the aggregate sales price of the Units, plus a
non-accountable expense allowance equal to 3% of the aggregate
sales price of the Units. In addition, to the Placement Agent
Agreement, the Company is required to issue to the Placement
Agent: (a) 5 year warrants to purchase up to 29,334 shares of
Common Stock at an exercise price of $4.50 per share and (b) 5
year warrants to purchase up to 14,667 shares of Common Stock at
an exercise price of $7.75 per share. The terms of the Placement
Agent warrants will be substantially similar to the Warrants
except that the Placement Agent warrants will also be exercisable
on a cashless basis and will include full ratchet anti-dilution
protection.

Item 3.02 Unregistered Sales of Equity Securities.

The information provided in Item 1.01 is incorporated by
reference into this Item 3.02.

The Units were sold without registration under the Securities Act
of 1933, as amended (the “Securities Act“), in reliance
upon an exemption from registration to Section 4(a)(2) of the
Securities Act. The Units were offered only to “accredited
investors,” as such term is defined under the Securities Act,
and were not offered to a general solicitation.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.