Filed
pursuant to Rule 424(b)(3)
File
No. 333-273285
ODYSIGHT.AI
INC.
SUPPLEMENT
NO. 5 DATED NOVEMBER 14, 2024
TO
THE PROSPECTUS DATED AUGUST 12, 2024
This
prospectus supplement (the “Supplement”) is part of and should be read in conjunction with the prospectus of Odysight.ai
Inc. (the “Company”), dated August 12, 2024 (as supplemented to date, the “Prospectus”). Unless
otherwise defined herein, capitalized terms used in this Supplement shall have the same meanings as in the Prospectus.
The
attached Quarterly Report on Form 10-Q for the third ended September 30, 2024 (excluding exhibits thereto), dated November 14,
2024, was filed with the Securities and Exchange Commission, and should be read in conjunction with the Prospectus dated August 12, 2024.
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
| ☒ |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended September 30, 2024
| ☐ |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the transition period from to
Commission
File No. 333-188920
| ODYSIGHT.AI
INC. |
| (Exact
name of registrant as specified in its charter) |
| Nevada |
|
47-4257143 |
| (State
or other jurisdiction |
|
(I.R.S.
Employer |
| of
incorporation or organization) |
|
Identification
No.) |
| Suite
7A, Industrial Park |
|
|
| P.O.
Box 3030, Omer, Israel |
|
8496500 |
| (Address
of Principal Executive Offices) |
|
(Zip
Code) |
| +972
73 370-4690 |
| (Registrant’s
telephone number, including area code) |
| |
| (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 exchange on which registered |
| N/A |
|
N/A |
|
N/A |
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 ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 |
☒ |
Smaller
reporting company |
| |
|
☐ |
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 ☒
As
of November 14, 2024, the registrant had 12,607,516 shares of common stock, par value $0.001 of the registrant issued and outstanding.
As
used in this Quarterly Report and unless otherwise indicated, the terms “Odysight.ai (formerly known as ScoutCam Inc.),”
“we,” “us,” “our,” or “our Company” refer to Odysight.ai. Unless otherwise specified,
all dollar amounts are expressed in United States dollars.
ODYSIGHT.AI
INC.
QUARTERLY
REPORT ON FORM 10-Q
TABLE
OF CONTENTS
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain
information set forth in this Quarterly Report on Form 10-Q, including in Item 2, “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and elsewhere herein may address or relate to future events and expectations and
as such constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
Statements which are not historical reflect our current expectations and projections about our future results, performance, liquidity,
financial condition, prospects and opportunities and are based upon information currently available to us and our management and their
interpretation of what is believed to be significant factors affecting our business, including many assumptions regarding future events.
Forward-looking
statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use
of the words “may,” “should,” “would,” “could,” “scheduled,” “expect,”
“anticipate,” “estimate,” “believe,” “intend,” “seek,” or “project”
or the negative of these words or other variations on these words or comparable terminology. Actual results, performance, liquidity,
financial condition and results of operations, prospects and opportunities could differ materially and perhaps substantially from those
expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors. These statements
may be found under the section of our Annual Report on Form 10-K for the year ended December 31, 2023 (filed on March 26, 2024) entitled
“Risk Factors” as well as in our other public filings.
In
light of these risks and uncertainties, and especially given the start-up nature of our business, there can be no assurance that the
forward-looking statements contained herein will in fact occur. Readers should not place undue reliance on any forward-looking statements.
Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, changed circumstances or any other reason.
Item
1. Financial Statements
ODYSIGHT.AI
INC. (Formerly known as ScoutCam Inc.)
INTERIM
FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2024
CONSOLIDATED
ODYSIGHT.AI INC.
ODYSIGHT.AI
INC. (Formerly known as ScoutCam Inc.)
INTERIM
CONDENSED CONSOLIDATED BALANCE SHEETS
| | |
September 30, 2024 | | |
December 31, 2023 | |
| | |
Unaudited | | |
Audited | |
| | |
USD in thousands | |
| Assets | |
| | |
| |
| | |
| | |
| |
| CURRENT ASSETS: | |
| | | |
| | |
| Cash and cash equivalents | |
| 20,906 | | |
| 8,945 | |
| Restricted cash | |
| 318 | | |
| - | |
| Short terms deposits | |
| - | | |
| 8,096 | |
| Accounts receivable | |
| 912 | | |
| 1,372 | |
| Inventory | |
| 328 | | |
| 504 | |
| Other current assets | |
| 634 | | |
| 432 | |
| Total current assets | |
| 23,098 | | |
| 19,349 | |
| | |
| | | |
| | |
| NON-CURRENT ASSETS: | |
| | | |
| | |
| Contract fulfillment assets | |
| 1,123 | | |
| 1,256 | |
| Property and equipment, net | |
| 423 | | |
| 477 | |
| Operating lease right-of-use assets | |
| 1,154 | | |
| 1,380 | |
| Severance pay asset | |
| 279 | | |
| 271 | |
| Other non-current assets | |
| 96 | | |
| 96 | |
| Total non-current assets | |
| 3,075 | | |
| 3,480 | |
| | |
| | | |
| | |
| TOTAL ASSETS | |
| 26,173 | | |
| 22,829 | |
The
accompanying notes are an integral part of these interim condensed consolidated financial statements.
ODYSIGHT.AI
INC. (Formerly known as ScoutCam Inc.)
INTERIM
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
| | |
September 30, 2024 | | |
December 31, 2023 | |
| | |
Unaudited | | |
Audited | |
| | |
USD in thousands | |
| Liabilities and shareholders’ equity | |
| | | |
| | |
| | |
| | | |
| | |
| CURRENT LIABILITIES: | |
| | | |
| | |
| Accounts payable | |
| 301 | | |
| 287 | |
| Contract liabilities - short term | |
| 615 | | |
| 527 | |
| Operating lease liabilities - short term | |
| 468 | | |
| 470 | |
| Accrued compensation expenses | |
| 1,152 | | |
| 546 | |
| Related parties | |
| 51 | | |
| 41 | |
| Other current liabilities | |
| 337 | | |
| 211 | |
| Total current liabilities | |
| 2,924 | | |
| 2,082 | |
| | |
| | | |
| | |
| NON-CURRENT LIABILITIES: | |
| | | |
| | |
| Contract liabilities - long term | |
| 1,479 | | |
| 1,795 | |
| Operating lease liabilities - long term | |
| 601 | | |
| 856 | |
| Liability for severance pay | |
| 255 | | |
| 261 | |
| Other non-current liabilities | |
| - | | |
| 28 | |
| Total non-current liabilities | |
| 2,335 | | |
| 2,940 | |
| | |
| | | |
| | |
| TOTAL LIABILITIES | |
| 5,259 | | |
| 5,022 | |
| | |
| | | |
| | |
| SHAREHOLDERS’ EQUITY: | |
| | | |
| | |
Common stock, $0.001 par value; 300,000,000
shares authorized as of September 30, 2024, and December 31, 2023, 12,607,516 and 10,443,768 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively | |
| 13 | | |
| 10 | |
| Additional paid-in capital | |
| 63,319 | | |
| 52,004 | |
| Accumulated deficit | |
| (42,418 | ) | |
| (34,207 | ) |
| TOTAL SHAREHOLDERS’ EQUITY | |
| 20,914 | | |
| 17,807 | |
| | |
| | | |
| | |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| 26,173 | | |
| 22,829 | |
The
accompanying notes are an integral part of these interim condensed consolidated financial statements.
ODYSIGHT.AI
INC. (Formerly known as ScoutCam Inc.)
INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
Nine months ended September 30, | | |
Three months ended September 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
Unaudited | |
| | |
USD in thousands | |
| | |
| |
| REVENUES | |
| 2,660 | | |
| 1,087 | | |
| 1,292 | | |
| 110 | |
| COST OF REVENUES | |
| 1,964 | | |
| 1,648 | | |
| 887 | | |
| 321 | |
| GROSS PROFIT (LOSS) | |
| 696 | | |
| (561 | ) | |
| 405 | | |
| (211 | ) |
| RESEARCH AND DEVELOPMENT EXPENSES | |
| 4,705 | | |
| 4,107 | | |
| 1,730 | | |
| 1,354 | |
| SALES AND MARKETING EXPENSES | |
| 806 | | |
| 877 | | |
| 347 | | |
| 208 | |
| GENERAL AND ADMINISTRATIVE EXPENSES | |
| 3,929 | | |
| 3,225 | | |
| 1,344 | | |
| 1,099 | |
| OPERATING LOSS | |
| (8,744 | ) | |
| (8,770 | ) | |
| (3,016 | ) | |
| (2,872 | ) |
| OTHER INCOME | |
| - | | |
| 10 | | |
| - | | |
| - | |
| FINANCING INCOME, NET | |
| 533 | | |
| 656 | | |
| 149 | | |
| 330 | |
| NET LOSS | |
| (8,211 | ) | |
| (8,104 | ) | |
| (2,867 | ) | |
| (2,542 | ) |
| Net loss per ordinary share (basic and diluted, USD) | |
| (0.74 | ) | |
| (0.86 | ) | |
| (0.23 | ) | |
| (0.24 | ) |
| Weighted average ordinary shares (basic and diluted, in thousands) | |
| 11,054 | | |
| 9,395 | | |
| 12,255 | | |
| 10,439 | |
The
accompanying notes are an integral part of these interim condensed consolidated financial statements.
ODYSIGHT.AI
INC. (Formerly known as ScoutCam Inc.)
INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Nine
Months Ended September 30, 2024 (Unaudited)
| | |
Number | | |
Amount | | |
capital | | |
deficit | | |
equity | |
| | |
Common Stock | | |
Additional paid-in | | |
Accumulated | | |
Total Shareholders’ | |
| | |
Number | | |
Amount | | |
capital | | |
deficit | | |
equity | |
| | |
In thousands | | |
USD in thousands | |
| Balance as of January 1, 2024 | |
| 10,444 | | |
$ | 10 | | |
$ | 52,004 | | |
$ | (34,207 | ) | |
$ | 17,807 | |
| Stock based compensation | |
| - | | |
| - | | |
| 1,500 | | |
| - | | |
| 1,500 | |
| Issuance of shares upon RSU vesting | |
| 19 | | |
| -* | | |
| -(*) | | |
| - | | |
| - | |
| Issuance of shares | |
| 2,145 | | |
| 3 | | |
| 9,815 | | |
| - | | |
| 9,818 | |
| Net loss | |
| - | | |
| - | | |
| - | | |
| (8,211 | ) | |
| (8,211 | ) |
| Balance as of September 30, 2024 | |
| 12,608 | | |
$ | 13 | | |
$ | 63,319 | | |
$ | (42,418 | ) | |
$ | 20,914 | |
Three
Months Ended September 30, 2024 (Unaudited)
| | |
Common Stock | | |
Additional paid-in | | |
Accumulated | | |
Total Shareholders’ | |
| | |
Number | | |
Amount | | |
capital | | |
deficit | | |
equity | |
| | |
In thousands | | |
USD in thousands | |
| Balance as of July 1, 2024 | |
| 10,458 | | |
$ | 10 | | |
$ | 52,967 | | |
$ | (39,551 | ) | |
$ | 13,426 | |
| Stock based compensation | |
| - | | |
| - | | |
| 537 | | |
| - | | |
| 537 | |
| Issuance of shares upon RSU vesting | |
| 5 | | |
| -* | | |
| -(*) | | |
| - | | |
| - | |
| Issuance of shares | |
| 2,145 | | |
| 3 | | |
| 9,815 | | |
| - | | |
| 9,818 | |
| Net loss | |
| - | | |
| - | | |
| - | | |
| (2,867 | ) | |
| (2,867 | ) |
| Balance as of September 30, 2024 | |
| 12,608 | | |
$ | 13 | | |
$ | 63,319 | | |
$ | (42,418 | ) | |
$ | 20,914 | |
| * |
Represents
an amount less than $1 thousand |
The
accompanying notes are an integral part of these interim condensed consolidated financial statements.
Nine
Months Ended September 30, 2023 (Unaudited)
| | |
Number | | |
Amount | | |
capital | | |
deficit | | |
equity | |
| | |
| | |
Additional | | |
| | |
Total | |
| | |
Common Stock | | |
paid-in | | |
Accumulated | | |
Shareholders’ | |
| | |
Number | | |
Amount | | |
capital | | |
deficit | | |
equity | |
| | |
In thousands | | |
USD in thousands | |
| | |
| | |
| | |
| | |
| | |
| |
| Balance as January 1, 2023 | |
| 7,122 | | |
$ | 7 | | |
$ | 36,541 | | |
$ | (24,762 | ) | |
$ | 11,786 | |
| Stock based compensation | |
| - | | |
| - | | |
| 1,056 | | |
| - | | |
| 1,056 | |
| Issuance of shares upon RSU vesting | |
| 25 | | |
| -* | | |
| -* | | |
| - | | |
| - | |
| Issuance of shares and warrants | |
| 3,294 | | |
| 3 | | |
| 13,818 | | |
| - | | |
| 13,821 | |
| Net loss | |
| - | | |
| - | | |
| - | | |
| (8,104 | ) | |
| (8,104 | ) |
| Balance as September 30, 2023 | |
| 10,441 | | |
$ | 10 | | |
$ | 51,415 | | |
$ | (32,866 | ) | |
$ | 18,559 | |
Three
Months Ended September 30, 2023 (Unaudited)
| | |
| | |
| | |
Additional | | |
| | |
Total | |
| | |
Ordinary shares | | |
paid-in | | |
Accumulated | | |
Shareholders’ | |
| | |
Number | | |
Amount | | |
capital | | |
deficit | | |
Equity | |
| | |
In thousands | | |
USD in thousands | |
| Balance as July 1, 2023 | |
| 10,437 | | |
$ | 10 | | |
$ | 51,110 | | |
$ | (30,324 | ) | |
$ | 20,796 | |
| Balance | |
| 10,437 | | |
$ | 10 | | |
$ | 51,110 | | |
$ | (30,324 | ) | |
$ | 20,796 | |
| Stock based compensation | |
| - | | |
| - | | |
| 371 | | |
| - | | |
| 371 | |
| Issuance of shares upon RSU vesting | |
| 4 | | |
| -* | | |
| -* | | |
| - | | |
| - | |
| Issuance expenses | |
| - | | |
| - | | |
| (66 | ) | |
| - | | |
| (66 | ) |
| Net loss | |
| - | | |
| - | | |
| - | | |
| (2,542 | ) | |
| (2,542 | ) |
| Balance as September 30, 2023 | |
| 10,441 | | |
$ | 10 | | |
$ | 51,415 | | |
$ | (32,866 | ) | |
$ | 18,559 | |
| Balance | |
| 10,441 | | |
$ | 10 | | |
$ | 51,415 | | |
$ | (32,866 | ) | |
$ | 18,559 | |
| * |
Represents
an amount less than $1 thousand |
The
accompanying notes are an integral part of these interim condensed consolidated financial statements.
ODYSIGHT.AI
INC. (Formerly known as ScoutCam Inc.)
INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
Nine months ended September 30, | | |
Three months ended September 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
Unaudited | |
| | |
USD in thousands | |
| | |
| | |
| | |
| | |
| |
| CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | | |
| | | |
| | | |
| | |
| Net loss | |
| (8,211 | ) | |
| (8,104 | ) | |
| (2,867 | ) | |
| (2,542 | ) |
| Adjustments to reconcile net loss to net cash used in operations: | |
| | | |
| | | |
| | | |
| | |
| Depreciation | |
| 92 | | |
| 239 | | |
| 28 | | |
| 47 | |
| Stock based compensation | |
| 1,500 | | |
| 1,056 | | |
| 537 | | |
| 371 | |
| Severance pay asset and liability | |
| (14 | ) | |
| 53 | | |
| (1 | ) | |
| (1 | ) |
| Interest and exchange differences from operating lease liability | |
| (29 | ) | |
| (78 | ) | |
| 13 | | |
| (56 | ) |
| Loss (Profit) from exchange differences on cash and cash equivalents | |
| 11 | | |
| 64 | | |
| (29 | ) | |
| 11 | |
| Interest income in respect of deposits | |
| 96 | | |
| (22 | ) | |
| - | | |
| 167 | |
| | |
| | | |
| | | |
| | | |
| | |
| Changes in operating assets and liability items: | |
| | | |
| | | |
| | | |
| | |
| Decrease (increase) in accounts receivable | |
| 460 | | |
| 60 | | |
| (154 | ) | |
| 158 | |
| Decrease (increase) in inventory | |
| 176 | | |
| (152 | ) | |
| 111 | | |
| (58 | ) |
| Decrease in operating lease liability | |
| (340 | ) | |
| (225 | ) | |
| (114 | ) | |
| (115 | ) |
| Decrease in right-of-use asset | |
| 338 | | |
| 211 | | |
| 111 | | |
| 117 | |
| Decrease (increase)in other current and non-current assets | |
| (202 | ) | |
| (292 | ) | |
| 23 | | |
| 95 | |
| Increase (decrease) in accounts payable | |
| 14 | | |
| (4 | ) | |
| 9 | | |
| (481 | ) |
| Increase (decrease) in related parties | |
| 10 | | |
| (6 | ) | |
| 9 | | |
| 5 | |
| Decrease in contract fulfillment assets | |
| 133 | | |
| 179 | | |
| 13 | | |
| 60 | |
| Decrease in current and non-current contract liabilities | |
| (228 | ) | |
| (793 | ) | |
| (101 | ) | |
| (110 | ) |
| Increase in accrued compensation expenses | |
| 606 | | |
| 396 | | |
| 187 | | |
| 307 | |
| Increase (decrease) in other current and non-current liabilities | |
| 66 | | |
| 80 | | |
| 26 | | |
| (230 | ) |
| Net cash flows used in operating activities | |
| (5,522 | ) | |
| (7,338 | ) | |
| (2,199 | ) | |
| (2,255 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| Purchase of property and equipment | |
| (38 | ) | |
| (94 | ) | |
| (8 | ) | |
| (37 | ) |
| Withdrawal of short terms deposits | |
| 8,000 | | |
| 18,000 | | |
| - | | |
| 15,000 | |
| Investment in short term deposits | |
| - | | |
| (18,500 | ) | |
| - | | |
| - | |
| Net cash flows provided by (used in) investing activities | |
| 7,962 | | |
| (594 | ) | |
| (8 | ) | |
| 14,963 | |
| | |
| | | |
| | | |
| | | |
| | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | | |
| | | |
| | |
| Proceeds from issuance of shares and warrants | |
| 9,850 | | |
| 13,835 | | |
| 9,850 | | |
| (78 | ) |
| Net cash flows provided by (used in) financing activities | |
| 9,850 | | |
| 13,835 | | |
| 9,850 | | |
| (78 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | |
| 12,290 | | |
| 5,903 | | |
| 7,643 | | |
| 12,630 | |
| BALANCE OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF THE PERIOD | |
| 8,945 | | |
| 10,099 | | |
| 13,552 | | |
| 3,319 | |
| LOSS (PROFIT) FROM EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | |
| (11 | ) | |
| (64 | ) | |
| 29 | | |
| (11 | ) |
| BALANCE OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT THE END OF THE PERIOD | |
| 21,224 | | |
| 15,938 | | |
| 21,224 | | |
| 15,938 | |
Non-cash
activities -
| | |
Nine months ended September 30, | | |
Three months ended September 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
Unaudited | |
| | |
USD in thousands | |
| Non cash activities | |
| | |
| | |
| | |
| |
| Right-of-use assets obtained in exchange for operating lease liabilities | |
| 167 | | |
| 1,577 | | |
| 47 | | |
| 1,112 | |
| Termination of right-of-use assets in exchange for cancellation of operating lease obligations | |
| (55 | ) | |
| (52 | ) | |
| - | | |
| (27 | ) |
The
accompanying notes are an integral part of these interim condensed consolidated financial statements.
ODYSIGHT.AI
INC. (Formerly known as ScoutCam Inc.)
NOTES
TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
1 – GENERAL:
| |
a. |
Odysight.ai
Inc (the “Company”), formerly known as ScoutCam Inc., was incorporated under the laws of the State of Nevada on March
22, 2013.
The
Company’s wholly owned subsidiary, Odysight.ai Ltd (“Odysight.ai”), formerly known as ScoutCam Ltd., was incorporated
in the State of Israel on January 3, 2019, and was merged into the Company on December 31, 2019, in a share exchange transaction,
following which the surviving operations of the merged entity were the operations of Odysight.ai.
On February 28, 2024, D. VIEW Ltd.,
a wholly owned subsidiary of the Company, was incorporated in the State of Israel to act as a local representative for the defense
market in Israel.
The
Company, through its subsidiaries, provides image-based platform solutions for the Predictive Maintenance (PdM) and Condition Based
Monitoring (CBM) markets with its visualization and AI platform. The Company’s video sensor-based platform provides solutions
for critical systems in the aviation, transportation, and energy industries. Its video-based sensors, embedded software, and AI
algorithms are deployed in hard-to-reach locations and harsh environments across a variety of PdM and CBM use cases and allow
maintenance and operations teams visibility into areas which are inaccessible under normal operation, or where the operating
ambience is not suitable for continuous real-time monitoring. Some of the Company’s products utilize micro visualization
technology in medical devices for minimally invasive medical procedures. |
ODYSIGHT.AI
INC. (Formerly known as ScoutCam Inc.)
NOTES
TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
1 – GENERAL (continued):
| |
b. |
Since
the incorporation of Odysight.ai and through September 30, 2024, the Company accumulated a deficit of approximately $42.4 million
and its activities have been funded mainly by its shareholders. The Company’s management believes the Company’ cash and
cash resources as of September 30, 2024 will allow the Company to fund its operating plan through at least the next 12 months from
the filing date of these consolidated financial statements. However, the Company expects to continue to incur significant research
and development and other costs related to its ongoing operations, requiring the Company to obtain additional funding in order to
continue its future operations until becoming profitable. |
NOTE
2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
a.
Unaudited Interim Financial Statements
The
accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting
principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of U.S. Securities
and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair
presentation have been included (consisting only of normal recurring adjustments except as otherwise discussed). For further information,
reference is made to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form
10-K for the year ended December 31, 2023.
b.
Principles of Consolidation
The
accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany
balances and transactions have been eliminated in consolidation.
c.
Use of estimates
The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenue and expenses during the reporting period. The Company evaluates on an ongoing basis its
assumptions, including those related to contingencies, deferred taxes, inventory impairment and stock-based compensation, as well as
in estimates used in applying the revenue recognition policy. Actual results may differ from those estimates.
ODYSIGHT.AI
INC. (Formerly known as ScoutCam Inc.)
NOTES
TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued):
d.
Significant Accounting Policies
The significant accounting policies
followed in the preparation of these unaudited interim condensed consolidated financial statements are identical to those applied in
the preparation of the latest annual financial statements. With the commencement of development and customization contracts during
the nine-month period ended September 30, 2024, in which the performance obligation is satisfied over time, the Company measures the
progress of the activities using the input method, based on the effort expended relative to the estimated total effort to satisfy
the performance obligation.
e.
Recent Accounting Pronouncements
Management
does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect
on the Group’s condensed consolidated financial statements.
NOTE
3 – LEASES:
In
December 2020, Odysight.ai
entered into a lease agreement for office space in Omer, Israel (the “Original Space”), with the 36-month term for such
agreement beginning on January 1, 2021. In
March 2021, Odysight.ai entered into a lease agreement for additional office space in Omer, Israel (the “Additional
Space”), with the term for such agreement ending December 31, 2023.
On
June 25, 2023, Odysight.ai entered into an amendment to these agreements, pursuant to which the lease for the Additional Space will be
shortened and end on June 30, 2023, and the lease for the original space will be extended for an additional five years until December
31, 2028. It was also agreed that Odysight.ai has an option to terminate the agreement for the Original Space after three years. Odysight.ai
expects that the lease period for the Original Space will be three years.
Monthly
lease payments under the agreement for the Original Space are approximately $7 thousand.
| |
b. |
Ramat
Gan office space |
In
May 2023, Odysight.ai entered into a lease agreement for office space in Ramat Gan, Israel. The agreement is for 48 months beginning
on July 1, 2023, and the Company has an option to extend the lease period for an additional two years. The Company does not currently
expect to extend the lease period. Monthly lease payments under the agreement are approximately $25 thousand.
Odysight.ai
subleases part of the office space in Ramat Gan to a third party for approximately $7 thousand per month.
| |
c. |
The
Company leases vehicles under various operating lease agreements. |
Supplemental
cash flow information related to operating leases was as follows:
SCHEDULE
OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO OPERATING LEASES
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
Nine months ended September 30, | | |
Three months ended September 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
Unaudited | |
| | |
USD in thousands | |
| | |
| | |
| | |
| | |
| |
| Cash paid for amounts included in the measurement of lease liabilities: | |
| | | |
| | | |
| | | |
| | |
| Operating cash flows from operating leases | |
| 443 | | |
| 262 | | |
| 146 | | |
| 143 | |
As
of September 30, 2024, the Company’s operating leases had a weighted average remaining lease term of 0.78 years and a weighted
average discount rate of 6% for vehicles and 12.8% for offices.
The
maturities of lease liabilities under operating leases as of September 30, 2024, are as follows:
SCHEDULE
OF MATURITIES LEASE LIABILITIES UNDER OPERATING LEASES
| | |
Operating leases | |
| | |
USD in thousands | |
| Remainder of 2024 | |
| 147 | |
| 2025 | |
| 552 | |
| 2026 | |
| 447 | |
| 2027 | |
| 157 | |
| Total future lease payments | |
| 1,303 | |
| Less imputed interest | |
| (234 | ) |
| Total lease liability balance | |
| 1,069 | |
ODYSIGHT.AI
INC. (Formerly known as ScoutCam Inc.)
NOTES
TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 – OTHER CURRENT LIABILITIES:
Other current liabilities
consisted of the following:
SCHEDULE OF
OTHER CURRENT LIABILITIES
| | |
September 30, | | |
December 31, | |
| | |
2024 | | |
2023 | |
| | |
USD in thousands | |
| Accrued
expenses | |
| 209 | | |
| 132 | |
| Other current
liabilities | |
| 128 | | |
| 79 | |
| Total
other current liabilities | |
| 337 | | |
| 211 | |
NOTE
5 – EQUITY:
| a. |
Private
Placement |
| |
|
| 1. |
On
March 29, 2021, the Company issued to certain investors, including Moshe (Mori) Arkin, a major stockholder and director of the
Company, an aggregate of 2,469,156
units in exchange for an aggregate purchase price of $20
million. Each
such unit consisted of (i) one share of the Company’s common stock and (ii) one warrant to purchase one share of the
Company’s common stock with an exercise price of $10.35
per share. Each such warrant is exercisable until March
31, 2026 and subject to customary adjustments. Pursuant to the terms of the foregoing warrants, following April 1, 2024, if the closing price of Company common
stock equal or exceeds 135%
of the aforementioned exercise price (subject to appropriate adjustments for stock splits, stock dividends, stock combinations and
other similar transactions after the issue date of the warrants) for any thirty (30) consecutive trading days, the Company may force
the exercise of the warrants, in whole or in part, by delivering to these investors a notice of forced exercise.
|
| |
|
| 2. |
On
March 16, 2023, the Company entered into stock purchase agreements for a private placement with (i) Moshe (Mori) Arkin and (ii) The Phoenix
Insurance Company Ltd. (“Phoenix Insurance”) and Shotfut Menayot Israel – Phoenix Amitim (“Phoenix Amitim”),
in connection with the sale and issuance of an aggregate of 3,294,117
units, at a purchase price of $4.25
per unit, and for an aggregate purchase price
of $14
million. Each unit consisted of: (i) one share
of the Company’s common stock and (ii) one warrant to purchase one share of the Company’s common stock with an exercise price
of $5.50.
The warrants are immediately exercisable, expire three years from the date of issuance and are subject to customary adjustments. |
| |
|
| 3. |
On
July 16, 2024, the Company issued 2,144,583 shares of its common stock in consideration for a purchase price of $4.80 per share to new
and existing investors, including Moshe (Mori) Arkin and The Phoenix Holdings,
through Phoenix Insurance and Phoenix Amitim (the “2024 Private Placement”). The Company raised approximately $10.3 million
(gross) in the 2024 Private Placement. |
Warrants:
As
of September 30, 2024, the Company had the following outstanding warrants to purchase common stock:
SCHEDULE
OF STOCK WARRANTS OUTSTANDING TO PURCHASE COMMON STOCK
| | |
| |
| |
Exercise Price | | |
Number of | |
| | |
Issuance | |
Expiration | |
Per Share | | |
Underlying | |
| Warrant | |
Date | |
Date | |
($) | | |
Common Stocks | |
| | |
| |
| |
| | |
| |
| March 2021 Warrants | |
March 29, 2021 | |
March 31, 2026 | |
| 10.35 | | |
| 2,469,156 | |
| March 2023 Warrants | |
March 27, 2023 | |
March 26, 2026 | |
| 5.50 | | |
| 3,294,117 | |
| | |
| |
| |
| | | |
| 5,763,273 | |
ODYSIGHT.AI
INC. (Formerly known as ScoutCam Inc.)
NOTES
TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
5 – EQUITY (continued):
| |
b. |
Stock-based
compensation to employees, directors and service providers: |
In
February 2020, the Company’s Board of Directors approved the 2020 Share Incentive Plan (the “2020 Plan”).
The
2020 Plan initially included a pool of 580,890 shares of common stock for grant to Company employees, consultants, directors and other
service providers. On March 15, 2020, the Company’s Board of Directors approved an increase to the 2020 Plan’s option pool
by an additional 64,099 shares of common stock. On June 22, 2020, the Company’s Board of Directors approved an increase to the
2020 Plan’s option pool by an additional 401,950 shares of common stock. During the second quarter of 2021, the Company’s
Board of Directors approved an increase to the 2020 Plan’s option pool by an additional 777,778 shares of common stock. During
the first quarter of 2023, the Company’s Board of Directors approved an increase to the 2020 Plan’s option pool by an additional
1,000,000 shares of common stock.
In
June 2024, the Company’s Board of Directors approved the 2024 Share Incentive Plan (the “2024 Plan”).
The
2024 Plan initially included a pool of 234,484 shares of common stock, representing the number of shares remaining available for grant
under the 2020 Plan. These shares are available for future grant to Company employees, consultants, directors and other service providers.
Shares that were subject to awards granted under either the 2020 Plan or the 2024 Plan that have expired or were cancelled or become un-exercisable
for any reason without having been exercised in full shall become available for future grant under the 2024 Plan.
In
July, 2024, the Company’s Board of Directors approved an increase to the 2024 Plan’s option pool by an additional 850,000
shares of common stock.
The
2020 Plan and 2024 Plan each provide for the grant of stock options (including incentive stock options and nonqualified stock
options), shares of common stock, restricted shares, restricted share units, and other share-based awards.
Stock
option activity:
During
nine months ended September 30, 2024, the Company granted 91,000 options pursuant to the 2020 Plan and 669,500 options pursuant to the
2024 Plan.
The
fair value of each option was estimated as of the date of grant or reporting period using the Black-Scholes option-pricing model, using
the following assumptions:
SCHEDULE
OF FAIR VALUE OF OPTIONS ESTIMATED ASSUMPTIONS
| | |
Nine months ended | |
| | |
September 30, 2024 | |
| Underlying value of ordinary shares ($) | |
| 5.55-5.70 | |
| Exercise price ($) | |
| 4.5-4.8 | |
| Expected volatility (%) | |
| 101 | % |
| Term of the options (years) | |
| 7 | |
| Risk-free interest rate | |
| 3.51%-4.23 | % |
The
cost of the benefit embodied in the options granted during the nine months ended September 30, 2024, based on their fair value as of
the grant date, is estimated to be approximately $3,692
thousand. These amounts will be recognized in the statements of operations and comprehensive income over the vesting
period.
The
following table summarizes stock option activity for the nine months ended September 30, 2024:
SCHEDULE
OF STOCK OPTION ACTIVITY
| | |
For the | |
| | |
Nine months ended | |
| | |
September 30, 2024 | |
| | |
| | |
Weighted | |
| | |
| | |
average | |
| | |
Number of | | |
exercise | |
| | |
Options | | |
price | |
| | |
| | | |
| $ | |
| Outstanding at beginning of period | |
| 2,455,069 | | |
| 3.46 | |
| Granted | |
| 760,500 | | |
| 4.76 | |
| Forfeited | |
| (23,335 | ) | |
| 3 | |
| Outstanding at end of period | |
| 3,192,234 | | |
| 3.77 | |
| | |
| | | |
| | |
| Vested at end of period | |
| 1,573,336 | | |
| 3.47 | |
ODYSIGHT.AI
INC. (Formerly known as ScoutCam Inc.)
NOTES
TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
5 – EQUITY (continued):
Restricted
stock unit (“RSU”) activity
The
Company from time to time has granted RSUs to its employees and service provider pursuant to the 2020 Plan.
Each
RSU will vest based on continued service which is generally over three years. The grant date fair value of the award will be recognized
as stock-based compensation expense over the requisite service period. The fair value of restricted stock units was estimated on the
date of grant based on the fair value of the Company’s common stock.
The
following table summarizes RSU activity for the nine months ended September 30, 2024:
SCHEDULE
OF STOCK OPTION ACTIVITY
| | |
For the | |
| | |
Nine months ended | |
| | |
September 30, 2024 | |
| | |
| | |
Weighted Average | |
| | |
Number of | | |
Grant Date Fair Value | |
| | |
RSUs | | |
per Share | |
| | |
| | | |
| $ | |
| Outstanding at beginning of period | |
| 39,585 | | |
| 4.08 | |
| Granted | |
| - | | |
| - | |
| Forfeited | |
| - | | |
| - | |
| Vested | |
| (19,165 | ) | |
| 4.34 | |
| Unvested and Outstanding at end of period | |
| 20,420 | | |
| 3.84 | |
The
following table sets forth the total stock-based payment expenses resulting from options and RSUs granted, included in the statements
of operation and comprehensive income:
SCHEDULE
OF STOCK-BASED PAYMENT EXPENSE
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
Nine months ended September 30, | | |
Three months ended September 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
Unaudited | |
| | |
USD in thousands | |
| | |
| | |
| | |
| | |
| |
| Cost of revenues | |
| 23 | | |
| 11 | | |
| 6 | | |
| 6 | |
| Research and development | |
| 402 | | |
| 323 | | |
| 177 | | |
| 58 | |
| Sales and marketing expenses | |
| 151 | | |
| 83 | | |
| 56 | | |
| 21 | |
| General and administrative | |
| 924 | | |
| 639 | | |
| 298 | | |
| 286 | |
| Total expenses | |
| 1,500 | | |
| 1,056 | | |
| 537 | | |
| 371 | |
ODYSIGHT.AI
INC. (Formerly known as ScoutCam Inc.)
NOTES
TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
6 – REVENUES:
SCHEDULE OF DISAGGREGATION OF REVENUE
| |
Disaggregation
of revenue |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
Nine months ended | | |
Three months ended | |
| | |
September 30, | | |
September 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
USD in thousands | | |
USD in thousands | |
| Development Services (*) | |
| 843 | | |
| 317 | | |
| 548 | | |
| 105 | |
| Products | |
| 1,817 | | |
| 770 | | |
| 744 | | |
| 5 | |
| Total Revenues | |
| 2,660 | | |
| 1,087 | | |
| 1,292 | | |
| 110 | |
|
(*) |
During
the second quarter of 2022, the Company completed the development of a customer-specific project for a Fortune 500 multinational
healthcare corporation and moved from the development phase of the project to its production phase. As a result, during the nine
months ended September 30, 2024, the Company recognized development services revenues in the amount of $317 thousand and related
development costs previously deferred in the amount of $180 thousand. The amounts were recognized based on the expected
manufacturing term of the product, which the Company estimates at seven years. In addition, the Company recognized product
revenues of $1,731 thousand during the nine months ended September 2024 from the sale of units of the product developed in the
context of these development services . |
| |
(*) |
During
the second quarter of 2022, the Company completed the development of a customer-specific
project for a Fortune 500 multinational healthcare corporation and moved from the development
phase of the project to its production phase. As a result, during the nine months ended September
30, 2024, the Company recognized development services revenues in the amount of $317 thousand
and related development costs previously deferred in the amount of $180 thousand. The amounts
were recognized based on the expected manufacturing term of the product, which the Company
estimates at seven years.
In
addition, the Company recognized product revenues of $1,731 thousand during the nine months ended September 2024 from the sale of
units of the product developed in the context of these development services.
During the nine months ended September 30, 2024 the Company recognized development
services revenues in the amount of $526
thousand from development and customization contracts in which the performance obligation is satisfied over time.
|
Contract
fulfillment assets and Contract liabilities:
The
Company’s contract fulfillment assets and contract liabilities as of September 30, 2024, and December 31, 2023, were as follows:
SCHEDULE
OF CONTRACT FULFILLMENT ASSETS AND CONTRACT LIABILITIES
| | |
September 30, | | |
December 31, | |
| | |
2024 | | |
2023 | |
| | |
USD in thousands | |
| Contract fulfillment assets | |
| 1,123 | | |
| 1,256 | |
| Contract liabilities | |
| 2,094 | | |
| 2,322 | |
Contract
liabilities include deferred service and advance payments.
The
change in contract fulfillment assets:
| | |
September 30, | | |
December 31, | |
| | |
2024 | | |
2023 | |
| | |
USD in thousands | |
| Balance at beginning of the period | |
| 1,256 | | |
| 1,495 | |
| Contract costs deferred during the period | |
| 47 | | |
| | |
| Contract costs recognized during the period | |
| (180 | ) | |
| (239 | ) |
| Balance at end of the period | |
| 1,123 | | |
| 1,256 | |
The
change in contract liabilities:
| | |
September 30, | | |
December 31, | |
| | |
2024 | | |
2023 | |
| | |
USD in thousands | |
| Balance at beginning of the period | |
| 2,322 | | |
| 3,644 | |
| Revenue deferred during the period | |
| 161 | | |
| - | |
| Revenue recognized during the period | |
| (389 | ) | |
| (1,322 | ) |
| Balance at end of the period | |
| 2,094 | | |
| 2,322 | |
Remaining
Performance Obligations
Remaining
Performance Obligations (“RPO”) represents contracted revenue that has not yet been recognized, which includes deferred revenue
and amounts that are expected to be invoiced and recognized as revenue in future periods. As of September 30, 2024, the total RPO amounted
to approximately $16.0
million. The total RPO amount includes an amount exceeding
$10 million related to a long-term purchase order agreement signed in Q3.2024 with a leading international defense contractor,
in respect of which no deferred revenue was recorded and no fulfillment of performance obligations commenced as of September 30, 2024.
ODYSIGHT.AI INC. (Formerly known as ScoutCam Inc.)
NOTES
TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
7 - INVENTORY:
Composed
as follows:
SCHEDULE
OF INVENTORY
| | |
September 30, | | |
December 31, | |
| | |
2024 | | |
2023 | |
| | |
USD in thousands | |
| Raw materials and supplies | |
| 290 | | |
| 445 | |
| Work in progress | |
| 37 | | |
| 34 | |
| Finished goods | |
| 1 | | |
| 25 | |
| Inventory Net | |
| 328 | | |
| 504 | |
During
the period ended September 30, 2024, no impairment occurred.
NOTE
8 – LOSS PER SHARE
Basic
loss per share is computed by dividing the net loss attributable to ordinary shareholders of the Company by the weighted average number
of ordinary shares as described below.
In
computing the Company’s diluted loss per share, the numerator used in the basic loss per share computation is adjusted for the
dilutive effect, if any, of the Company’s potential shares of common stock. The denominator for diluted loss per share is a computation
of the weighted-average number of ordinary shares and the potential dilutive ordinary shares outstanding during the period.
NOTE
9 – RELATED PARTIES
| |
a. |
Balances
with related parties: |
SCHEDULE
OF BALANCES WITH RELATED PARTIES
| | |
September 30,
2024 | | |
December 31,
2023 | |
| | |
USD in thousands | |
| Directors (directors’ accrued compensation) | |
| 51 | | |
| 31 | |
| Smartec R&D Ltd. (see b below) | |
| - | | |
| 10 | |
| Related parties | |
| 51 | | |
| 41 | |
| |
b. |
During
nine months ended September 30, 2023, the Company received development services from Smartec R&D Ltd., a company owned by the
Company’s former CTO. |
Total
compensation paid to Smartec R&E Ltd. during the nine months ended September 30, 2023, was approximately $29 thousand.
NOTE
10 - COMMITMENTS AND CONTINGENCIES
On
April 2023, the Company received approval from the Israel Innovation Authority (previously the Office of the Chief Scientist) (the
“IIA”) to support and enhance the Company’s production line and capabilities in the next 24 months until April
2025. Pursuant
to the agreement with an IIA relating to the program, the Company is required to pay royalties of 3% to the IIA up to the amount of
IIA funding received and the accrued interest repayment of the grant. Such repayment is contingent upon the Company successfully
completing its enhancement plans and generating sales from the enhancements preformed. The Company has no obligation to repay
these grants if its enhancement plans are not completed or are aborted or if such enhancement plans generate no sales.
NOTE
11 – SUBSEQUENT EVENTS
The
Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements
were issued. The Company identified no subsequent events as of the date that the financial statements were issued.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Readers
are advised to review the following discussion and analysis of our financial condition and results of operations together with our consolidated
financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the consolidated financial
statements and related notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2023. Some of the information
contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our
plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See “Cautionary
Note Regarding Forward-Looking Statements”. You should review the “Risk Factors” section of our Annual Report for the
fiscal year ended December 31, 2023, for a discussion of important factors that could cause actual results to differ materially from
the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Unless otherwise
designated, the terms “we,” “us,” “our,” “Odysight.ai,” “the Company,” and
“our Company” refer to Odysight.ai Inc. and our wholly-owned subsidiaries, including Odysight.ai Ltd., a private company
organized under the laws of the State of Israel.
Overview
Our
primary business activity in prior quarters was enlarging our focus on R&D activities in the domain of PdM and CBM (we refer to
these applications as Industry 4.0, or I4.0), including in sectors such as aerospace, maritime energy and other heavy machinery,
engines and complicated mechanics which require ongoing monitoring and predictive maintenance applications. The main effect of this
activity was to enable the Company to accelerate its growth and support an increased workload and solution development
requirements from customers.
Comparison
of the nine months ended September 30, 2024 and 2023
The
following table summarizes our results of operations for the nine months period ended September 30, 2024 and 2023, together with the
changes in those items in dollars and as a percentage:
| | |
Nine months ended September 30, | | |
| |
| | |
2024 | | |
2023 | | |
% Change | |
| Revenues | |
| 2,660,000 | | |
| 1,087,000 | | |
| 145 | % |
| Cost of Revenues | |
| 1,964,000 | | |
| 1,648,000 | | |
| 19 | % |
| Gross Profit (Loss) | |
| 696,000 | | |
| (561,000 | ) | |
| | |
| Research and development expenses | |
| 4,705,000 | | |
| 4,107,000 | | |
| 15 | % |
| Sales and marketing expense | |
| 806,000 | | |
| 877,000 | | |
| (8 | )% |
| General and administrative expenses | |
| 3,929,000 | | |
| 3,225,000 | | |
| 22 | % |
| Operating Loss | |
| (8,744,000 | ) | |
| (8,770,000 | ) | |
| - | |
Revenues
For
the nine months ended September 30, 2024, we generated revenues of $2,660,000, an increase of $1,573,000, or 145 %, compared to revenues
of $1,087,000 for the nine months ended September 30, 2023.
The
increase in revenues was primarily attributable to an increase in revenues from a Fortune 500 multinational healthcare corporation,
as well as recognition of revenues from Industry 4.0.
The
increase in revenues from a Fortune 500 multinational healthcare corporation (see note 6 to our interim financial statements) was
mainly due to:
| |
- |
an
increase in the number of units sold and supplied to the customer during the nine months ended September 30, 2024, and |
| |
- |
formalization
of negotiations with the customer, following which the sale price per unit increased significantly compared to the previous sale
price. |
A
substantial portion of our current revenue comes from a limited number of customers.
Cost
of Revenues
Cost
of revenue is primarily comprised of cost of personnel and certain allocated expenses related to facilities, logistics and quality
control.
Cost
of revenues for the nine months ended September 30, 2024 was $1,964,000, an increase of $316,000, or 19%, compared to cost of revenues
of $1,648,000 for the nine months ended September 30, 2023.
The
increase in cost of revenues was primarily due to an increase in revenues.
Gross
Profit (Loss)
Gross
profit for the nine months ended September 30, 2024, was $696,000. Gross loss for the nine months ended September 30, 2023, was $561,000.
The
change was due to both an increase in revenues and an increase in cost of revenues, as described above.
The
transition from a gross loss to a gross profit was principally attributable to:
| |
- |
formalization
of negotiations with the Fortune 500 multinational healthcare corporation, following which the unit price experienced a substantial
increase compared to its previous level; and |
| |
- |
an
increase in the number of units sold and supplied to the customer during the nine months ended September 30, 2024. |
Research
and Development Expenses
Research
and development efforts are focused on new product development, as well as developing and enhancing functionality for our existing products.
These expenses primarily consist of employee-related expenses, including salaries, benefits, and stock-based compensation expense for
personnel engaged in research and development functions, consulting, and professional fees related to research and development activities,
prototype materials, facility costs, and other allocated expenses, including costs related to rent and maintenance of our facilities, utilities,
depreciation, and other supplies. We expense research and development costs as incurred.
Research
and development expenses for the nine months ended September 30, 2024 were $4,705,000, an increase of $598,000, or 15%, compared to
$4,107,000 for the nine months ended September 30, 2023.
The increase in research and development expenses was mainly due to an
increase in payroll and related expenses for new employee recruitment but also attributable in part to:
| | - | an
increase in stock-based compensation due to new options grants; |
| | - | procuring
materials and employment of subcontractors for Industry 4.0 projects; and |
| | - | development
of new products. |
We
expect that our research and development expenses will increase as we continue to develop and improve our products and services in the
I4.0 domain.
Sales
and Marketing Expenses
Sales
and marketing expenses primarily consist of payroll and related expenses, consulting services, promotional materials, exhibitions, demonstration
equipment, and certain allocated facility infrastructure costs.
Sales
and marketing expenses for the nine months ended September 30, 2024 were $806,000, a decrease of $71,000, or 8%, compared to $877,000
for the nine months ended September 30, 2023.
The
decrease in sales and marketing expenses was mainly due to one-time expenses incurred during the nine months ended September 30,
2023 which did not reoccur during the nine months ended September 30, 2024. During the nine months ended September 30, 2023, we
incurred significant expenses related to rebranding activities. These activities included costs associated, inter alia, with
altering our name, design of a new logo, and the creation of new promotional materials.
We
expect that our sales and marketing expenses will increase as we expand our commercial activity in the I4.0 domain.
General
and Administrative Expenses
General
and administrative expenses primarily consist of payroll and other related costs, including stock-based compensation. General and administrative
expenses also include direct and allocated cost, such as facility-related costs, professional fees, legal, patent, investors and public
relations, accounting, auditing, tax services, and insurance costs.
General
and administrative expenses for the nine months ended September 30, 2024, were $3,929, 000, an increase of $704,000, or 22%, compared
to $3,225,000 for the nine months ended September 30, 2023.
The
increase in general and administrative expenses was primarily due to:
| |
- |
an
increase in professional services expenses due to the hiring of a financial consultant, IR consultant, HR consultant, and the appointment
of new directors; |
| |
- |
an
increase in payroll and related expenses due to cash compensation bonuses paid to existing employees, including the CEO, CFO, and
Senior VP of Product Portfolio; and |
| |
- |
an
increase in stock-based compensation due to new options grants. |
Operating
loss
We
incurred an operating loss of $8,744,000 for the nine months ended September 30, 2024, a decrease of $26,000, or 0.3%, compared to
operating loss of $8,770,000 for the nine months ended September 30, 2023.
The
decrease in operating loss was primarily due to an increase in gross profit and a decrease in sales and marketing expenses, partially
offset by increase in expenses related to research and development and general and administrative expenses, each as described above.
Cash
Flows
The
following table sets forth the significant sources and uses of cash for the periods set forth below (in dollars):
| | |
Nine month ended September 30, | |
| | |
2024 | | |
2023 | |
| Cash used in Operating Activity | |
| (5,522,000 | ) | |
| (7,338,000 | ) |
| Cash provided by (used in) Investing Activity | |
| 7,962,000 | | |
| (594,000 | ) |
| Cash provided by Financing Activity | |
| 9,850,000 | | |
| 13,835,000 | |
Operating
Activities
Our
primary uses of cash from operating activities have been for payroll expenses, research and development costs, manufacturing costs, marketing
and promotional expenses, professional services costs, and costs related to our facilities. We expect that cash flows related to our operating
activities will continue to increase as our business and our working capital requirements grow.
During
the nine months ended September 30, 2024, cash used in operating activities was $5.5 million, consisting of net loss of $8.2 million,
partially offset by a favorable net change in operating assets and liabilities of $1 million and a non-cash benefit of $1.7 million.
Our non-cash benefit consisted primarily of non-cash charges for stock-based compensation. The net change in our operating assets and
liabilities primarily reflects cash inflows from changes in accounts receivable and accrued compensation expenses, partially offset by
outflows from changes in current and non-current other assets and contract liabilities.
During
the nine months ended September 30, 2023, cash used in operating activities was $7.3 million, consisting of a net loss of $8.1
million, an unfavorable net change in operating assets and liabilities of $0.5 million, partially offset by a non-cash benefit of
$1.3 million. Our non-cash benefit consisted primarily of non-cash charges for stock-based compensation.
Investing
Activities
For
the nine months ended September 30, 2024, net cash flows provided by investing activities was $8 million, consisting mainly of withdrawal
of short-term deposits.
For
the nine months ended September 30, 2023, net cash flows used in investing activities was $0.6 million, consisting mainly of investment,
net on short-term deposits.
Financing
Activities
During
the nine months ended September 30, 2024, cash provided by financing activities was $9.9 million, consisting of cash proceeds from issuance
of shares, net of issuance costs.
During
the nine months ended September 30, 2023, cash provided by financing activities was $13.9 million, consisting of cash proceeds from issuance
of shares and warrants, net of issuance costs.
Comparison
of the three months ended September 30, 2024 and 2023
The
following table summarizes our results of operations for the three months period ended September 30, 2024, and 2023, together with the
changes in those items in dollars and as a percentage:
| | |
Three months ended September 30, | | |
| |
| | |
2024 | | |
2023 | | |
% Change | |
| Revenues | |
| 1,292,000 | | |
| 110,000 | | |
| 1075 | % |
| Cost of Revenues | |
| 887,000 | | |
| 321,000 | | |
| 176 | % |
| Gross Profit (Loss) | |
| 405,000 | | |
| (211,000 | ) | |
| | |
| Research and development expenses | |
| 1,730,000 | | |
| 1,354,000 | | |
| 28 | % |
| Sales and marketing expense | |
| 347,000 | | |
| 208,000 | | |
| 67 | % |
| General and administrative expenses | |
| 1,344,000 | | |
| 1,099,000 | | |
| 22 | % |
| Operating Loss | |
| (3,016,000 | ) | |
| (2,872,000 | ) | |
| 5 | % |
Revenues
For
the three months ended September 30, 2024, we generated revenues of $1,292,000, an increase of $1,182,000, or 1,075%, compared to revenues
of $110,000 for the three months ended September 30, 2023.
The
increase in revenues was primarily attributable to an increase in revenues from a Fortune 500 multinational healthcare corporation,
as well as recognition of revenues from Industry 4.0.
The
increase in revenues from a Fortune 500 multinational healthcare corporation (see note 6 to our interim financial statements) was
mainly due to:
| |
- |
an
increase in the number of units sold and supplied to the customer during the three months ended September 30, 2024, and |
| |
- |
formalization
of negotiations with the customer, following which the sale price per unit increased significantly compared to the previous sale
price. |
Cost
of Revenues
Cost
of revenue is primarily comprised of cost of personnel and certain allocated expenses related to facilities, logistics, and quality
control.
Cost
of revenues for the three months ended September 30, 2024 was $887,000, an increase of $566,000, or 176%, compared to cost of revenues
of $321,000 for the three months ended September 30, 2023.
The
increase in cost of revenues was primarily due to increase in revenues.
Gross
Profit ( Loss)
Gross
profit for the three months ended September 30, 2024, was $405,000 compared to gross loss for the three months ended September 30, 2023
of $211,000.
The
change was due to both an increase in revenues and an increase in cost of revenues, as described above.
The
transition from a gross loss to a gross profit was principally attributable to:
| |
- |
formalization
of negotiations with the Fortune 500 multinational healthcare corporation, following which the unit price experienced a substantial
increase compared to its previous level; and |
| |
- |
an
increase in the number of units sold and supplied to the customer during the three months ended September 30, 2024. |
Research
and Development Expenses
Research
and development efforts are focused on new products development, as well as developing and enhancing functionality for our existing products.
These expenses primarily consist of employee-related expenses, including salaries, benefits, and stock-based compensation expense for
personnel engaged in research and development functions, consulting, and professional fees related to research and development activities,
prototype materials, facility costs, and other allocated expenses, including cost related to rent and maintenance of our facilities, utilities,
depreciation, and other supplies. We expense research and development costs as incurred.
Research
and development expenses for the three months ended September 30, 2024 were $1,730,000, an increase of $376,000, or 28%, compared to
$1,354,000 for the three months ended September 30, 2023.
The
increase was mainly due to the following reasons:
| - | an
increase in stock-based compensation due to new options grants; |
| - | procuring
materials and employment of subcontractors for Industry 4.0 projects; and |
| - | development
of new products. |
We
expect that our research and development expenses will increase as we continue to develop and improve our products and services in the
I4.0 domain.
Sales
and Marketing Expenses
Sales
and marketing expenses primarily consist of payroll and related expenses, consulting services, promotional materials, exhibitions, demonstration
equipment, and certain allocated facility infrastructure costs.
Sales
and marketing expenses for the three months ended September 30, 2024, were $347,000, an increase of $139,000, or 67%, compared to $208,000
for the three months ended September 30, 2023.
The
increase was mainly due to the following reasons:
| - | an
increase in stock-based compensation due to new options grants; and |
| - | exhibition
and international travel expenses. |
We
expect that our sales and marketing expenses will increase as we expand our commercial activity in the I4.0 domain.
General
and Administrative Expenses
General
and administrative expenses primarily consist of payroll and other related costs, including stock-based compensation. General and administrative
expenses also include direct and allocated cost, such as facility-related, professional fees, legal, patent, investors and public relations,
accounting, auditing, tax services, and insurance costs.
General
and administrative expenses for the three months ended September 30, 2024, were $1,344,000, an increase of $245,000, or 22%, compared
to $1,099,000 for the three months ended September 30, 2023.
The
increase in general and administrative expenses was primarily due to:
| - | an
increase in professional services expenses due to the hiring of a financial consultant, IR
consultant, HR consultant and the appointment of new directors; |
| - | an increase
in payroll and related expenses due to cash compensation bonuses paid to existing employees, including the CEO, CFO, and Senior VP of
Product Portfolio; and |
| - | an
increase in stock-based compensation due to new options grants. |
Operating
loss
We
incurred an operating loss of $3,016,000 for the three months ended September 30, 2024, an increase of $144,000, or 5%, compared to operating
loss of $2,872,000 for the three months ended September 30, 2023.
The
increase in operating loss was primarily due to an increase in sales and marketing expenses, research and development expenses, and
general and administrative expenses, partially offset by an increase in gross profit, each as described above.
Cash
Flows
The
following table sets forth the significant sources and uses of cash for the periods set forth below (in dollars):
| | |
Three month ended September 30, | |
| | |
2024 | | |
2023 | |
| Cash used in Operating Activity | |
| (2,199,000 | ) | |
| (2,255,000 | ) |
| Cash provided by (used in) Investing Activity | |
| (8,000 | ) | |
| 14,963,000 | |
| Cash provided by (used in) Financing Activity | |
| 9,850,000 | | |
| (78,000 | ) |
Operating
Activities
Our
primary use of cash from operating activities was for payroll expenses, research and development costs, manufacturing costs, marketing
and promotional expenses, professional services costs and costs related to our facilities. We expect that cash flows related to our operating
activities will continue to increase as our business and our working capital requirements grow.
During
the three months ended September 30, 2024, cash used in operating activities was $2.2 million, consisting of net loss of $2.9 million,
a favorable net change in operating assets and liabilities of $0.1 million and a non-cash benefit of $0.5 million. Our non-cash benefit
consisted primarily of non-cash charges of $0.5 million for stock-based compensation.
During
the three months ended September 30, 2023, cash used in operating activities was $2.3 million, consisting of a net loss of $2.5
million, an unfavorable net change in operating assets and liabilities of $0.3 million and a non-cash benefit of $0.5 million. Our
non-cash benefit consisted primarily of non-cash charges of $0.3 million for stock-based compensation.
Investing
Activities
For
the three months ended September 30, 2024, net cash flows used in investing activities was $8,000, attributable mainly to a purchase
of property and equipment.
For
the three months ended September 30, 2023, net cash provided by investing Activity was $15 million, consisting mainly of withdrawal,
net on short-term deposits.
Financing
Activities
During
the three months ended September 30, 2024, cash provided by financing activities was $9.9 million, consisting of cash proceeds from issuance
of shares, net of issuance costs.
For
the three months ended September 30, 2023, net cash flows used in financing activities was $78,000, consisting of issuance expenses.
Contractual
Obligations and Commitments
During
the nine months ended September 30, 2024, there were no material changes to our contractual obligations and commitments since the year
ended December 31, 2023.
Liquidity
and Capital Resources
As
of September 30, 2024, we had cash, cash equivalents and restricted cash of $21 million compared to cash and cash equivalents and short-term
deposits of $17 million as of December 31, 2023. In addition, as of September 30, 2024, we incurred an accumulated deficit of approximately
$42.4 million, as compared to $34.2 million as of December 31, 2023.
During July 2024, we closed a
private placement in which we issued 2,144,583 shares of our common stock for a purchase price of $4.80 per share to new and existing
investors resulting in gross proceeds of $10.3 million.
Our
primary sources of liquidity to date have been from fund-raising and warrant exercises.
Additional
Cash Requirements
We
plan to continue to invest in long-term growth, and therefore we expect that our expenses will grow. We currently believe that our existing
cash and cash equivalents and short-term deposits will allow us to fund our operating plan through at least the next 12 months. We expect
our expenses will increase in connection with our ongoing activities, particularly as we continue the research and development and the
scale up process of our I4.0 solutions. We expect to incur significant commercialization expenses related to product sales, marketing,
manufacturing, and distribution. Furthermore, we will continue to incur additional costs associated with operating as a public company.
Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. We may raise these funds
through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our common
stock. There is no assurance that we will be able to maintain operations at a level sufficient for investors to obtain a return on their
investment in our common stock, or that we will be able to raise sufficient capital required to implement our business plan on acceptable
terms, if at all. Even if we are successful in raising sufficient capital to implement our business plan, we will, most likely, continue
to be unprofitable for the foreseeable future. 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.
Off-Balance
Sheet Arrangements
None.
Item
3. Quantitative and Qualitative Disclosures About Market Risk.
As
a smaller reporting company, we are not required to provide the information requested by this Item.
Item
4. Controls and Procedures.
Disclosure
Controls and Procedures
Under
the supervision and with the participation of our management, including our principal executive officer and our principal financial officer,
we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Exchange Act Rule 13a-15(e). Based
on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures
were effective as of the end of the period covered by this report.
No
change in our internal control over financial reporting, as defined in Exchange Act Rule 13a-15(e), occurred during the fiscal quarter
ended September 30, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.
PART
II- OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS
From
time to time, we may become involved in legal proceedings relating to claims arising from the ordinary course of business. Our management
believes that there are currently no claims or actions pending against us, the ultimate disposition of which could have a material adverse
effect on our results of operations, financial condition or cash flows.
ITEM
1A. RISK FACTORS.
Not
applicable.
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There
have been no unregistered sales of equity securities in addition to the sales provided under Form 8-K as filed with the Securities and Exchange Commission (“SEC”) during the
recent fiscal quarter ended September 30, 2024.
ITEM
3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM
4. MINE SAFETY DISCLOSURE
Not
applicable.
ITEM
5. OTHER INFORMATION
Mr. Ido Molad,
our VP Research and Development, updated the Company that due to personal reasons he intends to step down from his position on
November 21, 2024. Mr. Molad will continue to be employed by the Company in a different capacity. The Company has nominated Mr. Gal
Shir, its Operation Manager, as acting VP R&D until a new VP R&D is recruited.
During
the quarter ended September 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1
trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408 of Regulation
S-K).
We use our website (www.odysight.ai)
as a channel of distribution for Company information. The information we post on our website may be deemed material. Accordingly, investors
should monitor our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. The contents
of our website are not, however, a part of this Quarterly Report.
ITEM
6. EXHIBITS.
| |
(a) |
The
following documents are filed as exhibits to this Quarterly Report or incorporated by reference herein. |
* Filed herewith
** Furnished herewith
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 hereunto duly authorized.
| Date:
November 14, 2024 |
ODYSIGHT.AI
INC |
| |
|
|
| |
By: |
/s/
Yehu Ofer |
| |
Name: |
Yehu
Ofer |
| |
Title: |
Chief
Executive Officer |
| |
|
Odysight.ai
Inc |
| |
|
|
| |
By: |
/s/
Einav Brenner |
| |
Name: |
Einav
Brenner |
| |
Title: |
Chief
Financial Officer |
| |
|
Odysight.ai
Inc |
Exhibit
31.1
CERTIFICATION
PURSUANT TO
RULE
13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS
ADOPTED PURSUANT TO
SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002
I,
Yehu Ofer, certify that:
| 1. |
I
have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2024 of Odysight.ai 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 quarter end 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 quarter end 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 quarter end 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 quarter end 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 14, 2024 |
|
| |
|
| /s/
Yehu Ofer |
|
| Yehu
Ofer |
|
| Chief
Executive Officer |
|
| (Principal
Executive Officer) |
|
Exhibit
31.2
CERTIFICATION
PURSUANT TO
RULE
13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS
ADOPTED PURSUANT TO
SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002
I,
Einav Brenner, certify that:
| 1. |
I
have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2024, of Odysight.ai 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 quarter end 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 quarter end 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 quarter end 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 quarter end 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 14, 2024 |
|
| |
|
| /s/
Einav Brenner |
|
| Einav
Brenner |
|
| Chief
Financial Officer |
|
| (Principal
Financial Officer) |
|
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 of Odysight.ai Inc. (the “Company”) on Form 10-Q for the period ended September 30,
2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Yehu Ofer, Chief
Executive Officer of the Company, 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. |
| /s/
Yehu Ofer |
|
| Yehu
Ofer |
|
| Chief
Executive Officer |
|
| (Principal
Executive Officer) |
|
| November
14, 2024 |
|
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 of Odysight.ai Inc. (the “Company”) on Form 10-Q for the period ended September
30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Einav Brenner,
Chief Financial Officer of the Company, 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. |
| /s/
Einav Brenner |
|
| Einav
Brenner |
|
| Chief
Financial Officer |
|
| (Principal
Financial Officer) |
|
| November
14, 2024 |
|
Odysight ai (QB) (USOTC:ODYS)
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Odysight ai (QB) (USOTC:ODYS)
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