What changed in this filing

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Item 9A. Controls and Procedures

2021-03-31 compared with 2020-03-16 · 1288 added, 731 removed, 505 unchanged (80% of the section changed)

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period covered by this Annual Report on Form 10-K.

Based on such evaluation, due to the material weakness discussed below, our

principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective

at a reasonable assurance level as of December 31, 2019.

Based on such evaluation, our principal executive officer and principal financial

officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of December 31,

Management’s

Report on Internal Control over Financial Reporting

is responsible for establishing and maintaining adequate internal control over

financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act.

The Company’s internal control

over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for external reporting purposes in accordance with U.S.

is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)

and 15d-15(f) of the Exchange Act.

The Company’s internal control over financial reporting is designed to provide reasonable

assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting

purposes in accordance with U.S.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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(“COSO 2013”).

Based on this evaluation, management concluded that our internal control over financial reporting as

of December 31, 2019 was not effective due to the material weakness described below.

In connection with

the preparation of our consolidated financial statements as of and for the year ended December 31, 2019, we have identified a

material weakness in our internal control over financial reporting in relation to complexities involving the accounting for our

reverse recapitalization transaction.

The cause of this material weakness was due to the complex accounting related to the reverse

recapitalization transaction, which required additional qualified accounting personnel with an appropriate level of experience,

and additional controls in the period-end financial reporting process commensurate with the complexity of the matter.

we have determined that this control deficiency constituted a material weakness in our internal control over financial reporting.

A material weakness is a deficiency or combination of deficiencies in our internal control over financial reporting such that

there is a reasonable possibility that a material misstatement of our consolidated financial statements would not be prevented

or detected on a timely basis.

This deficiency could result in additional misstatements to our consolidated financial statements

that would be material and would not be prevented or detected on a timely basis.

are evaluating and implementing additional procedures in order to remediate this material weakness, however, we cannot assure

you that these or other measures will fully remediate the material weakness in a timely manner.

Attestation Independent

Report of the Registered Public Accounting Firm

This annual report on

Form 10-K does not include an attestation report of the Company’s independent registered public accounting

Efforts of Previously Disclosed Material Weaknesses

discussed in our 2019 Annual Report on Form 10-K, in connection with the audit of our financial statements for the year ended

December 31, 2019, management and our independent registered public accounting firm identified a material weakness in our internal

control over financial reporting.

response to that material weakness, we implemented a remediation plan for the identified material weakness.

As part of our remediation

plan, during 2019 we recruited additional personnel with a requisite level of qualification and experience.

addition, we reviewed our existing processes and controls in order to identify additional control deficiencies and designed new controls

or adjusted the design of existing controls in order to improve our processes and controls.

The new controls and the revised existing

controls included controls to address the non-routine complex accounting issues.

More specifically, there is a renewed emphasis on conducting

the necessary procedures with the full internal accounting team and external consultants to review and research the proper guidance and

approach toward the accounting, and documenting as such in a white paper or memo as needed.

on the above, and the results of testing conducted during the year ended December 31, 2020, we concluded that the identified material

weakness was remediated as of December 31, 2020.

Independent Report of the Registered Public Accounting Firm

annual report on Form 10-K does not include an attestation report of the Company’s independent registered public accounting

firm regarding internal control over financial reporting.

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in Internal Control over Financial Reporting

During the quarter ended

December 31, 2019, there were no changes in our internal control over financial reporting that have materially affected, or are

reasonably likely to materially affect, our internal control over financial reporting.

for the remediation of the previously identified material weakness discussed below, there were no other changes in internal control

over financial reporting during the year ended December 31, 2020 that have materially affected or are reasonably likely to materially

affect the Company’s internal control over financial reporting.

Other information

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following table sets forth the names and ages of our directors and executive officers:

Benad Goldwasser

Benad Goldwasser &dagger;

Donnerstein &dagger;

Yaron Silberman*

Executive Officer

Executive Officer (outgoing)

Executive Officer (incoming)

Financial Officer

Donnerstein &dagger;

Technology Officer

of Research and Development

Benad Goldwasser has served as chairman of our board of directors since December 26, 2019, and has served as chairman of ScoutCam

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Goldwasser holds an MD and MBA from Tel-Aviv University.

Yaron Silberman has served as our chief executive officer since December 27, 2019, and has served as chief executive officer

of ScoutCam Ltd.

since March 2019.

Prior to that, since January 2011, Dr.

Silberman served as ScoutCam’s VP Sales and Marketing.

Silberman has served as Marketing Director of NiTi Surgical Solutions Ltd., and as Product Manager of Given Imaging Ltd.

Silberman holds a PhD in Computational Neuroscience and Data Processing from Hebrew University of Jerusalem, Israel, an MBA from

the College of Management Academic Studies of Rishon Le’Zion, Israel, and a BA in Theoretical Mathematics from The Technion

Institute of Technology, Israel.

Yosef has served as our chief financial officer since December 27, 2019.

Yosef is a certified public accountant with

many years of experience, who has served as the Company’s controller since December 2009.

During 2008-2009 Ms.

worked in the audit department at Kesselman & Kesselman, a member firm of PricewaterhouseCoopers International Limited.

Yosef holds a BA in Economics and Accounting from the Ben-Gurion University of the Negev.

Donnerstein has served on our board of directors since December 26, 2019.

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Amit is a certified public accountant

directors are elected for a term of one year and serve until such director’s successor is duly elected and qualified.

executive officer serves at the pleasure of the board.

Moshe Arkin has served on our board of directors since February 15, 2021.

Arkin is a leading life science and pharmaceutical

entrepreneur and serves as the chairman of Arkin Holdings Ltd., which he founded in 2009.

Arkin has served as chairman of

the board of directors of Sol Gel Technologies Ltd.

SLGL) since 2014 and sits on the board of directors of several private

pharmaceutical and medical device companies, including SoniVie Ltd., a company developing systems for the treatment of pulmonary

arterial hypertension, Digma Medical, a company developing systems to treat insulin resistance present in type 2 diabetes and

other metabolic syndrome diseases, and Valcare Medical, a company developing heart valve devices.

From 2005 to 2008, Mr.

served as the head of generics at Perrigo Company, and from 2005 until 2011, as a member of its board of directors.

Prior to joining

Sol Gel Technologies Ltd., Mr.

Arkin served as a director of cCAM Biotherapeutics Ltd., a company focused on the discovery and

development of novel immunotherapies to treat cancer from 2012 until its acquisition in 2015 by Merck & Co., Inc.

served as chairman of Agis Industries Ltd.

from 1972 until its acquisition by Perrigo Company in 2005.

Arkin holds a B.A.

in psychology from the Tel Aviv University, Israel.

Yaron Silberman served as our Chief Executive Officer from December 27, 2019 until March 31, 2021, and has served as Chief

Executive Officer of ScoutCam Ltd.

from March 2019 until March 31, 2021.

Prior to that, since January 2011, Dr.

Silberman served

as ScoutCam’s VP Sales and Marketing.

Silberman has served as Marketing Director of NiTi Surgical Solutions Ltd., and

as Product Manager of Given Imaging Ltd.

Silberman holds a PhD in Computational Neuroscience and Data Processing from Hebrew

University of Jerusalem, Israel, an MBA from the College of Management Academic Studies of Rishon Le’Zion, Israel, and a

BA in Theoretical Mathematics from The Technion Institute of Technology, Israel.

Yaron Silberman’s employment with the Company was terminated on March 7, 2021, effective as of March 31, 2021.

Yovav Sameah will serve as Chief Executive Officer of the Company beginning April 15, 2021.

Prior to his position with the

Sameah was the Chief Executive Officer of Frontline PCB Solutions, a non-public worldwide leading provider of Pre-Production

and Industry 4.0 SW solutions in the PCB industry, and the subsidiary of KLA-Tencor Corp.

From September 2013

until July of 2015, Mr.

Sameah was the Corporate Vice President and Chief Products Officer at Orbotech Ltd.

(acquired by KLA-Tencor

in February of 2019).

Prior to that, Mr.

Sameah held a variety of roles at Orbotech, including Vice President of Electronic Components

Manufacturers Business (PCB Division) from September 2012 until September 2013, and Vice President AOI & Repair Product Line

(PCB Division) from March 2008 until March 2012.

Sameah holds both a BSc in chemical engineering and an MBA from Ben-Gurion

University, Israel.

Yosef has served as our Chief Financial Officer since December 27, 2019.

Yosef is a certified public accountant with many

years of experience, and held various positions with Medigus Ltd.

(Nasdaq:MDGS) since December of 2009, including most recently

as chief financial officer and prior thereto as financial controller.

During 2008-2009 Ms.

Yosef worked in the audit department

at Kesselman & Kesselman, a member firm of PricewaterhouseCoopers International Limited.

Yosef holds a BA in Economics

and Accounting from the Ben-Gurion University, Israel.

Amir Govrin has served as our Chief Technology Officer since May 1, 2019.

Prior to his position with ScoutCam, Mr.

held various positions at Medigus Ltd.

MDGS) beginning in 2003, including VP R&D, R&D manager and GERD project

Prior to his tenure at Medigus, Mr.

Govrin was project manager at Aran R&D from 1997 until 2003, and an R&D engineer

at Netafim Ltd.

from 1992 until 1997.

Govrin holds a B.Sc in mechanical engineering from Tel Aviv University, Israel.

Katrin Dlugach has served as our VP of Research and Development since July 1, 2019.

Prior to her position with ScoutCam,

Dlugach was a system engineer and project manager at Nanofabrica Ltd.

from August 2018 to June 2019.

Before that, Ms.

served in a number of roles, including chief of development and chief executive officer, at Nitinotes Ltd.

from 2014 until 2018.

Earlier in her career, Ms.

Dlugach held a variety of R&D positions at Medigus Ltd.

Dlugach holds a B.Sc.,

and MBA from Ben-Gurion University, Israel.

directors are elected for a term ending at the following annual meeting of the stockholders and serve until such director’s

successor is duly elected and qualified.

Each executive officer serves at the pleasure of the board.

currently have no significant employees.

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Compensation Table

following table sets out the compensation paid, for the twelve-month period ended December 31, 2019, to the following Named Executive

Yaron Silberman, our Chief Executive Officer and the Chief Executive Officer of our wholly-owned subsidiary, ScoutCam Ltd.;

Maimon, our former Chief Executive Officer, who resigned from such role on December 26, 2019;

Govrin, the Chief Technology Officer of our wholly-owned subsidiary, ScoutCam Ltd.;

Golov, the VP Business Development of our wholly-owned subsidiary, ScoutCam Ltd.

Name and Principal Position

Option Awards

All Other Compensation

$ in thousands

following table sets out the compensation paid, for the year ended December 31, 2020, to the following Named Executive Officers:

Yaron Silberman, the outgoing Chief Executive Officer of ScoutCam Inc.

and the outgoing Chief Executive Officer of

our wholly-owned subsidiary, ScoutCam Ltd.;

Govrin, the Chief Technology Officer of ScoutCam Inc.

and of our wholly-owned subsidiary, ScoutCam Ltd.;

Dlugach, VP R&D of ScoutCam Inc.

and of our wholly-owned subsidiary, ScoutCam Ltd.

and Principal Position

Other Compensation

Yaron Silberman,

Chief Executive Officer (1)

Former Chief Executive Officer (2)

Chief Technology Officer of ScoutCam Ltd.

VP Business Development of ScoutCam Ltd.

Executive Officer (1)

Technology Officer (2)

Katrin Dlugach,

VP R&D of ScoutCam Ltd.

Silberman’s compensation earned in his capacity as the Chief Executive Officer of wholly-owned subsidiary, ScoutCam

Silberman did not earn any compensation in his capacity as the Chief Executive Officer of ScoutCam Inc.

Maimon’s compensation earned in his capacity as the Chief Executive Officer of Intellisense Solutions Inc., from

March 31, 2019 until December 26, 2019.

Govrin’s compensation earned in his capacity as the Chief Technology Officer of our wholly-owned subsidiary,

ScoutCam Ltd.

Golov’s compensation earned in his capacity as the VP Business Development of our wholly-owned subsidiary, ScoutCam

Golov’s employment with the Company concluded on February 28, 2020.

have entered into written employment agreements with each of our executive officers.

All of these agreements contain customary

provisions regarding noncompetition, confidentiality of information and assignment of inventions.

However, the enforceability

of the noncompetition provisions may be limited under applicable law.

In addition, we have entered into agreements with each executive

officer and director pursuant to which we have agreed to indemnify each of them to the fullest extent permitted by law to the

extent that these liabilities are not covered by directors and officers insurance.

Govrin did not earn any compensation in his capacity as the Chief Technology Officer of ScoutCam Inc.

Katrin Dlugach compensation earned in his capacity as the Chief Technology Officer of our wholly-owned subsidiary,

ScoutCam Ltd.

Dlugach did not earn any compensation in her capacity as the VP R&D of ScoutCam Inc.

the equity-based compensation expenses recorded in the Company’s consolidated financial statements for the year ended

December 31, 2020, based on the option’s fair value, calculated in accordance with accounting guidance for equity-based

compensation.

and through our Israeli subsidiary, have entered into written

employment agreements with each of our executive officers.

All of these agreements contain customary provisions regarding noncompetition,

confidentiality of information and assignment of inventions.

However, the enforceability of the noncompetition provisions may

be limited under applicable law.

In addition, we have entered into agreements with each executive officer and director pursuant

to which we have agreed to indemnify each of them to the fullest extent permitted by law to the extent that these liabilities

are not covered by directors and officers insurance.

Equity Awards

were no equity awards made to our Named Executive Officers that were outstanding as of December 31, 2019.

following table provides information concerning unexercised options for each of our named executive officers, as that term is

defined in Item 402(m)(2) of Regulation S-K as of our fiscal year end of December 31, 2020.

Name and Position

of Securities Underlying Unexercised Options (#) Exercisable

of Securities Underlying Unexercised Options (#) Unexercisable

Yaron Silberman,

February 12, 2027

Chief Executive Officer

June 22, 2027

Tanya Yosef, Chief Financial Officer

February 12, 2027

Amir Govrin, Chief Technology Officer

February 12, 2027

Katrin Dlugach, VP R&D

February 12, 2027

25% of the options granted will vest on the first anniversary, and 6.25% of the options will vest at the end of each subsequent

three-month period thereafter over the course of the following three (3) years;

and (iii) an acceleration mechanism pursuant to

which any outstanding and unvested option shall immediately accelerate and vest upon the occurrence of certain events, including,

inter alia, a merger or sale of all assets of the Company.

33.33% of the options granted will vest on the first, and 8.33% of the options will vest at the end of each subsequent three-month

period thereafter over the course of the following two (2) years;

and (iii) an acceleration mechanism pursuant to which any outstanding

and unvested option shall immediately accelerate and vest upon the occurrence of certain events, including, inter alia, a merger

or sale of all assets of the Company.

or Similar Benefit Plans

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following a change in control.

following table sets out the compensation paid to directors for services rendered during the twelve-month period ended December

Option Awards

Benad Goldwasser (1)(2)

following table sets out the compensation paid to directors for services rendered during the year ended December 31, 2020.

Goldwasser (1)(2)

Shmuel Donnerstein (3)

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Lior Amit (3)

Idan Maimon (4)

Eyal Ben Ami (4)

Irit Yaniv (4) (5)

as a director of ScoutCam Inc.

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on December 26, 2019.

as a director of Intellisense Solutions Inc.

on December 26, 2019.

as a director of ScoutCam Inc.

on May 18, 2020.

February 14, 2021, Dr.

Irit Yaniv tendered her resignation as a member of the Board

of Directors and our wholly-owned subsidiary, ScoutCam Ltd.

February 15, 2021, the Board of Directors appointed Mr.

Moshe (Mori) Arkin to

serve as a member of the Board of Directors and to fill the vacancy immediately

following the resignation of Dr.

the equity-based compensation expenses recorded in the Company’s consolidated financial statements for the year ended

December 31, 2020, based on the option’s fair value, calculated in accordance with accounting guidance for equity-based

compensation.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder matters

Ownership of Certain Beneficial Owners and Management

table below provides information regarding the beneficial ownership of our Common Stock as of December 31, 2019, of (i) each of

our current directors, (ii) each of the Named Executive Officers, (iii) all of our current directors and officers as a group,

table below provides information regarding the beneficial ownership of our Common Stock as of March 28, 2021, of (i) each

of our current directors, (ii) each of the Named Executive Officers, (iii) all of our current directors and officers as a group,

and (iv) each person or entity known to us who owns more than 5% of our Common Stock.

percentage of Common Stock beneficially owned is based on 26,884,921 shares of Common Stock outstanding as of December 31, 2019.

The number and percentage of shares beneficially owned by a person or entity also include shares of Common Stock issuable upon

exercise of warrants that are currently exercisable or will become exercisable within 60 days of December 30, 2019.

However, these

shares are not deemed to be outstanding for the purpose of computing the percentage of shares beneficially owned of any other

person or entity.

percentage of Common Stock beneficially owned is based on 38,073,022 shares of Common Stock outstanding as of March

The number and percentage of shares beneficially owned by a person or entity also include shares of Common Stock

issuable upon exercise of warrants that are currently exercisable or will become exercisable within 60 days of March 28, 2021.

However, these shares are not deemed to be outstanding for the purpose of computing the percentage of shares beneficially

owned of any other person or entity.

otherwise indicated below, the address for each beneficial owner listed in the table below is c/o ScoutCam Inc., Suite 7A, Industrial

Box 3030, Omer, Israel 8496500.

Name and Address of Beneficial Owner

Title of Class

and Address of Beneficial Owner

of Beneficial

Ownership (1)

Percent of Class

Benad Goldwasser (2)

Yaron Silberman

Shmuel Donnerstein (3)

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Isaac Zilberman (5)

Lior Amit (6)

Moshe (Mori) Arkin (7)

Yaron Silberman (8)

Tanya Yosef (9)

Amir Govrin (10)

Katrin Dlugach (11)

Directors and officers as a group (12 individuals)

Yoram Baumann (4)

Less than 1%.

ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect

2 unchanged sentences

and investment power with respect to the shares of Common Stock beneficially owned by them.

of 206,807 shares of Common Stock and 310,211 warrants to purchase shares of Common Stock, which are currently exercisable

or will become exercisable within 60 days of December 31, 2019.

of 413,614 shares of Common Stock and 620,421 warrants to purchase shares of Common Stock, which are currently exercisable

or will become exercisable within 60 days of December 31, 2019

of 620,421 shares of Common Stock and 930,632 warrants to purchase shares of Common Stock, which are currently exercisable

or will become exercisable within 60 days of December 31, 2019.

of 395,464 shares of Common Stock, options to purchase 1,490,088 shares of Common Stock and warrants to purchase

206,807 shares of Common Stock, which are currently exercisable or will become exercisable within 60 days of March

of 620,421 shares of Common Stock, options to purchase 48,069 shares of Common Stock and warrants to purchase

413,614 shares of Common Stock, which are currently exercisable or will become exercisable within 60 days of March

of 48,069 option to purchase shares of Common Stock, which are currently exercisable or will become exercisable within

60 days of March 28, 2021.

of 48,069 option to purchase shares of Common Stock, which are currently exercisable or will become exercisable within

60 days of March 28, 2021.

of 48,069 option to purchase shares of Common Stock, which are currently exercisable or will become exercisable within

60 days of March 28, 2021.

Moshe Arkin is the sole shareholder and sole director of M.

Arkin (1999) Ltd.

and may therefore be deemed to be the indirect

beneficial owner of the shares of Common Stock and warrants to purchase shares of Common Stock owned directly by M.

of 333,097 option to purchase shares of Common Stock, which are currently exercisable or will become exercisable within

60 days of March 28, 2021.

of 133,239 option to purchase shares of Common Stock, which are currently exercisable or will become exercisable within

60 days of March 28, 2021.

of 266,478 option to purchase shares of Common Stock, which are currently exercisable or will become exercisable within

60 days of March 28, 2021.

of 116,584 option to purchase shares of Common Stock, which are currently exercisable or will become exercisable within

60 days of March 28, 2021.

of 16,918,423 shares of Common Stock and warrants to purchase 1,181,207 shares of Common Stock, which

are currently exercisable or will become exercisable within 60 days of March 28, 2021.

of 4,468,367 shares of Common Stock and 5,862,213 warrants to purchase shares of Common Stock, which are currently

exercisable or will become exercisable within 60 days of March 28, 2021.

Certain relationships and related transactions, and director independence

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June 3, 2019, Medigus executed a capital contribution into ScoutCam Ltd.

of an aggregate amount of $720,000.

for an aggregate amount of $720,000.

July 31, 2019, ScoutCam Ltd.

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The repayment of the credit line amount

is spread over one year in monthly payments beginning on the date of the Closing Date, being January 2020.

of December 31, 2019, ScoutCam Ltd.

has withdrawn the entire amount of the line of credit.

is spread over one year in monthly payments beginning on the Closing Date, being January 2020.

As of December 31, 2019, ScoutCam

withdrew the entire amount of the line of credit.

September 3, 2019, a certain Asset Transfer Agreement by and between ScoutCam Ltd.

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and licenses, collectively representing an aggregate of $9.8 million.

September 16, 2019, Intellisense and Medigus entered into the Exchange Agreement, pursuant to which Medigus assigned, transferred

and delivered 100% of its holdings in ScoutCam Ltd.

to Intellisense, in exchange for consideration consisting of shares of the

Company’s common stock representing 60% of the issued and outstanding share capital of the Company immediately upon the

Closing Date.

The Exchange Agreement was conditioned on certain obligations by the respective parties, including, but not

limited to, the Company having no less than $3 million in cash on hand upon the Closing Date, and that the Company bear

the costs and expenses in connection with the execution of the Exchange Agreement.

The Exchange Agreement provided that if ScoutCam

achieves an aggregate amount of $33 million in sales within the first three years immediately after the Closing Date,

the Company will issue to Medigus 2,688,492 shares of the Company’s common stock, which represents 10% of the Company’s

issued and outstanding share capital as of the Closing Date.

December 1, 2019, Medigus and ScoutCam Ltd.

entered into that certain Amended and Restated Asset Transfer Agreement, which transferred

and assigned certain assets and intellectual property rights related to its miniaturized imaging business.

Under the Amended and

Restated Asset Transfer Agreement, Medigus transferred two patent families to ScoutCam Ltd.

in exchange for a perpetual, transferable,

worldwide, royalty free, sub licensable license, to access and use the transferred patent families in connection with the development,

marketing and sale of the Medigus Ultrasonic Surgical Endostapler.

In addition, Medigus granted us a non-exclusive license to

access, use, improve, develop, market and sell licensed intellectual property, including the right to any future versions, enhancements,

improvements and derivative works of such licensed intellectual property in connection with the development and commercialization

of the ScoutCam miniature video technology.

a condition of the aforementioned license, Medigus is prohibited from selling, offering to sell or grant any ownership right in

the licensed intellectual property to any potential direct competitor of ScoutCam Ltd.

In addition, ScoutCam Ltd.

to provide Medigus with consultancy and support services for no consideration, on matters relating to the management, development,

maintenance and commercialization of Medigus’

patent portfolio.

The Amended and Restated Asset Transfer Agreement is for

an indefinite term and it was contractually permissible to terminate the agreement pursuant to the mutual written consent of the

parties prior to closing.

on December 1, 2019, ScoutCam Ltd.

and Medigus entered into that certain License Agreement granting ScoutCam Ltd.

non-exclusive, transferable solely upon an M&A Event (as defined therein), royalty free, license to access, use, improve,

develop either by or on behalf of ScoutCam Ltd., market and sell the licensed patent family, including the right to any future

versions, enhancements, improvements and derivative works of the licensed intellectual property for the purpose of developing

and commercializing the ScoutCam miniature video technology.

As a condition to the agreement, Medigus is prohibited from selling,

offering to sell or grant any ownership right in the licensed intellectual property to any potential direct competitor of ScoutCam

patent family licensed under the License Agreement includes know-how which was funded through benefits and incentives provided

As a result of such funding, the patent family is subject to certain restrictions and obligations pursuant to the

Innovation Law.

The restrictions applicable to patent family licensed pursuant to the License Agreement require approval of the

IIA prior to manufacturing products resulting from IIA funded know-how outside of Israel, prior to the transfer of IIA funded

know-how out of Israel and prior to a grant of the license out of Israel in connection with the IIA funded know-how.

ScoutCam Ltd.

is obligated to notify the IIA of any change of control and of any non-Israeli entity which becomes an “Interested

as defined in the Israeli Companies Law, 5759-1999, as amended.

An Interested Party includes a shareholder holdings

5% or more of a company’s issued and outstanding share capital, an entity entitled to appoint a director or the chief executive

officer of a company as well as the directors and chief executive officer of a company.

December 10, 2019, ScoutCam Ltd.

3 unchanged sentences

and an amount representing 3% of any exercise price related to those warrants issued as part of that certain Securities Purchase

Agreement executed by and between the Company and those investors listed therein.

Additionally, in the event the total proceeds

received as a result of exercise of such Warrants will be less than $2 million at the time of their expiration, the Consultant

will be required to invest $250,000 in the Company.

February 12, 2020, the Company’s Board of Directors authorized the allotment of options to purchase 2,235,691

shares of Common Stock to Prof.

Benad Goldwasser, our Chairman of the Board, representing 5% of our fully-diluted

share capital as of the Closing Date as in accordance with that agreement on July 31, 2019, and 1,865,346 options to purchase

shares of Common Stock to certain officers of the Company.

Each option is convertible into one share of Common Stock

at an exercise price of $0.29.

What changed 10-K

Item 9A. Controls and Procedures