Odysight.ai Inc. 10-Q

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 June 30, 2021 ☐ 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 SCOUTCAM INC. (Exact name of registrant as specified in its charter) Nevada 47-4257143 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) Suite 7A , Industrial Park P.O. Box 3030 , Omer , Israel 8496500 (Address of Principal Executive Offices) (Zip Code) + 972 73 370-4691 (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 August 12, 2021, the registrant had 6,928,527 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 “ScoutCam,” “we,” “us,” “our,” or “our Company” refer to ScoutCam Inc. Unless otherwise specified, all dollar amounts are expressed in United States dollars. SCOUTCAM INC. QUARTERLY REPORT ON FORM 10-Q TABLE OF CONTENTS Page Cautionary Note Regarding Forward-Looking Statements 3 PART 1-FINANCIAL INFORMATION Item 1. Consolidated Financial Statements (unaudited) 4 Consolidated Balance Sheets 5 Consolidated Statements of Comprehensive Loss 7 Statements of Stockholders’ Equity 8 Consolidated Statements of Cash Flows 10 Notes to Consolidated Financial Statements 11 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 20 Item 3. Quantitative and Qualitative Disclosures about Market Risk 25 Item 4. Control and Procedures 25 PART II-OTHER INFORMATION Item 1A. Risk Factors 26 Item 6. Exhibits 26 SIGNATURES 27 - 2 - 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, 2020 (filed on March 31, 2021) 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. On August 9, 2021, we filed an amendment to our Articles of Incorporation in order to effect a one-for-nine reverse stock split of our common stock, par value $0.001 per share (the “Common Stock”) pursuant to which holders of our Common Stock received one share of our Common Stock for every nine shares of Common Stock held. Unless the context expressly dictates otherwise, all references to share and per share amounts referred to herein reflect the reverse stock split. - 3 - Item 1. Financial Statements ScoutCam INC. INTERIM FINANCIAL STATEMENTS AS OF JUNE 30, 2021 CONSOLIDATED SCOUTCAM INC. Page Interim Condensed Consolidated Financial Statements - in US Dollars (USD) in thousands Interim Condensed Consolidated Balance Sheets (unaudited) 5 Interim Condensed Consolidated Statements of Operations (unaudited) 7 Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited) 8 Interim Condensed Consolidated Statements of Cash Flows (unaudited) 10 Notes to the Interim Condensed Consolidated Financial Statements 11 - 4 - SCOUTCAM INC. INTERIM CONDENSED CONSOLIATED BALANCE SHEETS June 30, December 31, 2021 2020 Unaudited Audited USD in thousands Assets CURRENT ASSETS: Cash and cash equivalents 21,775 3,373 Accounts receivable 60 17 Inventory 145 244 Medigus receivable - 47 Other current assets 857 348 Total current assets 22,837 4,029 NON-CURRENT ASSETS: Contract fulfillment assets 1,510 1,130 Property and equipment, net 400 269 Operating lease right-of-use assets 385 107 Severance pay asset 416 360 Total non-current assets 2,711 1,866 TOTAL ASSETS 25,548 5,895 The accompanying notes are an integral part of these interim condensed consolidated financial statements. - 5 - SCOUTCAM INC. INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) June 30, December 31, 2021 2020 Unaudited Audited USD in thousands Liabilities and shareholders’ equity CURRENT LIABILITIES: Accounts payables 303 79 Contract liabilities - 69 Operating lease liabilities - short term 187 60 Accrued compensation expenses 429 369 Medigus payable 13 - Other accrued expenses 218 195 Total current liabilities 1,150 772 NON-CURRENT LIABILITIES: Contract liabilities 1,385 779 Operating lease liabilities - long term 198 47 Liability for severance pay 333 333 Total non-current liabilities 1,916 1,159 TOTAL LIABILITIES 3,066 1,931 SHAREHOLDERS’ EQUITY: Common stock, $ 0.001 par value; 300,000,000 and 75,000,000 shares authorized as of June 30, 2021 and December 31, 2020, 6,928,527 and 4,084,122 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively 7 4 Additional paid-in capital 32,476 10,267 Accumulated deficit ( 10,001 ) ( 6,307 ) TOTAL SHAREHOLDERS’ EQUITY 22,482 3,964 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 25,548 5,895 The accompanying notes are an integral part of these interim condensed consolidated financial statements. - 6 - SCOUTCAM INC. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS 2021 2020 2021 2020 Six months ended Three months ended June 30, June 30, 2021 2020 2021 2020 Unaudited USD in thousands (except per share data) Revenues 298 74 274 34 Cost of revenues 610 281 407 151 Gross Loss ( 312 ) ( 207 ) ( 133 ) ( 117 ) Research and development expenses 754 370 421 115 Sales and marketing expenses 293 188 148 136 General and administrative expenses 2,328 1,680 1,395 568 Operating loss ( 3,687 ) ( 2,445 ) ( 2,097 ) ( 936 ) Financing income (expenses), net ( 7 ) 62 9 ( 34 ) Net Loss ( 3,694 ) ( 2,383 ) ( 2,088 ) ( 970 ) Net loss per ordinary share (basic and diluted, USD) ( 0.67 ) ( 0.73 ) ( 0.31 ) ( 0.28 ) Weighted average ordinary shares (basic and diluted, in thousands) 5,480 3,243 6,724 3,431 - 7 - SCOUTCAM INC. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY Six Months Ended June 30, 2021 (Unaudited) Ordinary shares Additional paid-in Accumulated Total Shareholders’ Number Amount capital deficit equity In thousands USD in thousands Balance at January 1, 2021 4,084 4 10,267 ( 6,307 ) 3,964 Issuance of shares and warrants 2,469 2 19,116 - 19,118 Stock based compensation - - 635 - 635 Exercise of warrants 375 1 2,458 - 2,459 Conversion of a loan from Parent company Conversion of a loan from Parent company, shares Net loss - - - ( 3,694 ) ( 3,694 ) Balance at June 30, 2021 6,928 7 32,476 ( 10,001 ) 22,482 Three Months Ended June 30, 2021 (Unaudited) Ordinary shares Additional paid-in Accumulated Total Shareholders’ Number Amount capital deficit Equity In thousands USD in thousands Balance at April 1, 2021 6,699 7 30,242 ( 7,913 ) 22,336 Exercise of warrants 229 ( * ) 1,678 - 1,678 Stock based compensation - - 556 - 556 Net loss - - - ( 2,088 ) ( 2,088 ) Balance at June 30, 2021 6,928 7 32,476 ( 10,001 ) 22,482 The accompanying notes are an integral part of these interim condensed consolidated financial statements. - 8 - Six Months Ended June 30, 2020 Ordinary shares Additional paid-in Accumulated Total Shareholders’ Number Amount capital deficit Equity in thousands USD in thousands Balance at January 1, 2020 2,987 3 4,159 ( 1,640 ) 2,522 Issuance of shares and warrants 677 1 2,857 - 2,858 Stock based compensation - - 871 - 871 Conversion of a loan from Medigus 87 ( * ) 381 - 381 Net loss - - - ( 2,383 ) ( 2,383 ) Balance at June 30, 2020 3,751 4 8,268 ( 4,023 ) 4,249 Three Months Ended June 30, 2020 Ordinary shares Additional paid-in Accumulated Total Shareholders’ Number Amount capital deficit Equity in thousands USD in thousands Balance at April 1, 2020 3,205 3 5,769 ( 3,053 ) 2,719 Issuance of shares and warrants 459 1 1,948 - 1,949 Stock based compensation - - 170 - 170 Conversion of a loan from Medigus 87 ( * ) 381 - 381 Net loss - - - ( 970 ) ( 970 ) Balance at June 30, 2020 3,751 4 8,268 ( 4,023 ) 4,249 * Represents an amount less than $1 thousand - 9 - SCOUTCAM INC. INTERIM CONDENSED CONOLIDATED STATEMENTS OF CASH FLOWS Six months ended Three months ended June 30, June 30, 2021 2020 2021 2020 Unaudited USD in thousands CASH FLOWS FROM OPERATING ACTIVITIES: Net loss ( 3,694 ) ( 2,383 ) ( 2,088 ) ( 970 ) Adjustments to reconcile net loss to net cash used in operations: Depreciation 39 27 22 16 Other non-cash items ( 56 ) 14 ( 56 ) ( 25 ) Share based compensation 635 837 556 155 Loss (Profit) from exchange differences on cash and cash equivalents ( 4 ) ( 84 ) ( 16 ) 12 CHANGES IN OPERATING ASSET AND LIABILITY ITEMS: Accounts receivables ( 43 ) ( 4 ) ( 49 ) ( 14 ) Inventory 99 ( 302 ) 200 ( 177 ) Medigus 60 ( 111 ) 14 ( 95 ) Other current assets ( 509 ) ( 254 ) ( 404 ) ( 201 ) Accounts payables 224 133 ( 189 ) 128 Contract fulfilment assets ( 380 ) - ( 140 ) - Contract liabilities 537 170 ( 126 ) 126 Accrued compensation expenses 60 36 140 60 Other accrued expenses ( 22 ) ( 356 ) ( 144 ) ( 155 ) Net cash flows used in operating activities ( 3,054 ) ( 2,277 ) ( 2,280 ) ( 1,140 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment ( 170 ) ( 221 ) ( 53 ) ( 36 ) Net cash flows used in investing activities ( 170 ) ( 221 ) ( 53 ) ( 36 ) CASH FLOWS FROM FINANCING ACTIVITIES: Loan repayment to Medigus - ( 81 ) - - Proceeds from exercise of warrants 2,504 - 1,723 - Proceeds from issuance of shares and warrants 19,118 2,858 9,618 1,949 Net cash flows provided by financing activities 21,622 2,777 11,341 1,949 PROFIT (LOSS) FROM EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS 4 84 16 ( 12 ) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 18,402 363 9,024 761 BALANCE OF CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 3,373 3,245 12,751 2,847 BALANCE OF CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 21,775 3,608 21,775 3,608 Non cash activities - Six months ended Three months ended June 30, June 30, 2021 2020 2021 2020 Unaudited Non cash activities USD in thousands Medigus loan settled against Medigus receivable - 41 - - Conversion of a loan from Medigus - 381 - 381 Issuance expenses 45 - 45 - The accompanying notes are an integral part of these interim condensed consolidated financial statements. - 10 - SCOUTCAM INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 – GENERAL : a . ScoutCam Inc. (the “Company”), formally known as Intellisense Solutions Inc. (Intellisense), was incorporated under the laws of the State of Nevada on March 22, 2013 . The Company was initially engaged in the business of developing web portals to allow companies and individuals to engage in the purchase and sale of vegetarian food products over the Internet. The Company was unable to execute it original business plan, develop significant operations or achieve commercial sales. Prior to the closing of the Securities Exchange Agreement (as defined below), the Company was a “shell company”. ScoutCam Ltd., or ScoutCam, was formed in the State of Israel on January 3, 2019 as a wholly-owned subsidiary of Medigus Ltd. (“Medigus”), an Israeli company traded on the Nasdaq Capital Market, and commenced operations on March 1, 2019. Upon incorporation, ScoutCam issued to Medigus 1,000,000 Ordinary shares with no par value. On March 2019, ScoutCam issued to Medigus an additional 1,000,000 Ordinary shares with no par value. ScoutCam was incorporated as part of a reorganization of Medigus, which was designed to distinguish ScoutCam’s miniaturized imaging business, or the micro ScoutCam™ portfolio, from Medigus’s other operations and to enable Medigus to form a separate business unit with dedicated resources focused on the promotion of such technology. In December 2019, Medigus and ScoutCam consummated a certain Amended and Restated Asset Transfer Agreement, under which Medigus transferred and assigned certain assets and intellectual property rights related to its miniaturized imaging business to ScoutCam. On September 16, 2019, Intellisense entered into a Securities Exchange Agreement (the “Exchange Agreement”), with Medigus, pursuant to which Medigus assigned, transferred and delivered 100 % of its holdings in ScoutCam to Intellisense, in exchange for consideration consisting of shares of Intellisense’s common stock representing 60% of the issued and outstanding share capital of Intellisense immediately upon the closing of the Exchange Agreement (the “Closing”). The Closing occurred on December 30, 2019 (the “Closing Date”). Although the transaction resulted in ScoutCam becoming a wholly owned subsidiary of Intellisense, the transaction constituted a reverse recapitalization since Medigus, the only shareholder of ScoutCam prior to the Exchange Agreement, was issued a substantial majority of the outstanding capital stock of Intellisense upon consummation of the Exchange Agreement, and also taking into account that prior to the Closing Date, Intellisense was considered as a shell corporation. Accordingly, ScoutCam is considered the accounting acquirer of the merged company. As of June 30, 2021 Medigus holds approximately 28 % of the Company. “Group” - the Company together with ScoutCam. ScoutCam has developed a range of micro CMOS (complementary metal-oxide semiconductor) and CCD (charge-coupled device) video cameras, including micro ScoutCam™ 1.2. These innovative cameras are suitable for both medical and industrial applications. Based on its proprietary technology, the Company designs and manufactures endoscopy and micro camera systems for partner companies. - 11 - SCOUTCAM INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 – GENERAL (continued): b. On August 9, 2021, the Company amended its Articles of Incorporation to effect a 9 to 1 reverse stock split of the Company’s outstanding Common Stock. As a result of the reverse stock split, every 9 shares of the Company’s outstanding Common Stock prior to the effect of that amendment was combined and reclassified into one share of the Company’s Common Stock. No fractional shares were issued in connection with or following the reverse split. The number of authorized capital of the Company’s Common Stock and par value of the shares remained unchanged. All share, stock option and per share information in these condensed consolidated financial statements have been adjusted to reflect the stock split on a retroactive basis. c . Since incorporation through June 30, 2021, the Group has an accumulated deficit of approximately $ 10 million and its activities have been funded mainly by its shareholders. The management believes the Group’s cash and cash resources as of June 30, 2021, will allow the Group to fund its operating plan through more than 12 months from the date of issuance of these financial statements. However, the Group expects to continue to incur significant research and development and other costs related to its ongoing operations and in order to continue its future operations, the Group will need to obtain additional funding until becoming profitable. d. In early 2020, the World Health Organization declared the rapidly spreading coronavirus disease (COVID-19) outbreak a pandemic. This pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. The Group considered the impact of COVID-19 on its operations and determined that there were no material adverse impacts on the Group’s results of operations and financial position as of June 30, 2021. These estimates may change, as new events occur and additional information is obtained. 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 Group’s Annual Report on Form 10-K for the year ended December 31, 2020. 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, stock based compensation, as well as in estimates used in applying the revenue recognition policy. Actual results may differ from those estimates. 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. 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. - 12 - SCOUTCAM INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 3 – LEASES : ScoutCam leases office and vehicles under operating leases. On June 30, 2021, the Group’s ROU assets and lease liabilities for operating leases totaled $ 385 thousand. In December 2020, ScoutCam entered into a lease agreement for office space in Omer, Israel. The agreement is for 36 months beginning on January 1, 2021. ScoutCam holds the right to terminate the lease agreement after 24 months. In March 2021, ScoutCam entered into a lease agreement for additional office space in Omer, Israel. The agreement is until December 31, 2023. ScoutCam holds the right to terminate these agreements by December 31, 2022. Monthly lease payments under the agreements are approximately $ 12 thousand. Lease expenses recorded in the interim consolidated statements of operations were $ 49 thousand for the six months ended June 30, 2021. Supplemental cash flow information related to operating leases was as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO OPERATING LEASES Six months ended 30, 2021 USD in thousands Cash payments for operating leases 49 Total lease expenses 49 As of June 30, 2021, the Company’s operating leases had a weighted average remaining lease term of 1.52 years and a weighted average discount rate of 10 %. Future lease payments under operating leases as of June 30, 2021 were as follows: SCHEDULE OF MATURITIES LEASE LIABILITIES UNDER OPERATING LEASES Operating leases USD in thousands Remainder of 2021 100 2022 183 2023 149 Total future lease payments 432 Less imputed interest ( 47 ) Total lease liability balance 385 Total future lease payments 432 - 13 - SCOUTCAM INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 4 – EQUITY : Private placement: a. In December 2019, the Company allocated in a private issuance, a total of 379,269 units at a purchase price of USD $ 8.712 per unit. Each unit was comprised of two shares of common stock par value US$ 0.001 per share, one Warrant A (defined below) and two Warrants B (defined below). The immediate proceeds (gross) from the issuance of the units amounted to approximately USD 3.3 million. Each Warrant A was exercisable into one share of common stock of the Company at an exercise price of USD 5.355 per share during the 12 month period following the allocation. Each Warrant B is exercisable into one share of common stock of the Company at an exercise price of USD 8.037 per share during the 18 month period following the allocation. In addition, Shrem Zilberman Group Ltd. (the “Consultant”) was entitled to receive the amount representing 3 % of any exercise price of each Warrant A or Warrant B that may be exercised in the future. In the event the total proceeds received as a result of exercise of 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 in return for shares of common stock of Company. During 2020, 332,551 Warrants A were exercised. 46,718 unexercised Warrants A expired on December 30, 2020. During the second quarter of 2021, 185,271 Warrants B were exercised. 573,256 unexercised Warrants B expired on June 30, 2021. b. On March 3, 2020, the Company issued in a private issuance a total of 108,880 units at a purchase price of USD 8.712 per unit. Each unit was comprised of two shares of common stock par value US$ 0.001 per share, one Warrant A (defined below) and two Warrants B (defined below). Each Warrant A was exercisable into one share of common stock of the Company at an exercise price of USD 5.355 per share during the 12 month period following the allocation. Each Warrant B is exercisable into one share of common stock of the Company at an exercise price of USD 8.037 per share during the 18 month period following the allocation. The gross proceeds from the issuance of all securities offered amounted to approximately USD 948 thousands. After deducting issuance costs, the Company received proceeds of approximately USD 909 thousand. During 2021, all Warrants A were exercised. c. On May 18, 2020, the Company allocated in a private issuance a total of 229,569 units at a purchase price of USD 8.712 per unit. Each unit was comprised of two shares of common stock par value US$ 0.001 per share, one Warrant A (defined below) and two Warrants B (defined below). Each Warrant A is exercisable into one share of common stock of the Company at an exercise price of USD 5.355 per share during the 18 month period following the allocation. Each Warrant B is exercisable into one share of common stock of the Company at an exercise price of USD 8.037 per share during the 24 month period following the allocation. - 14 - SCOUTCAM INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The gross proceeds from the issuance of all securities offered amounted to approximately USD 2 million. After deducting issuance costs, the Company received proceeds of approximately USD 1.9 million. During February 2021, 37,349 Warrants A were exercised. d. On June 23, 2020, (the “Conversion Date”), the Company entered into and consummated a Side Letter Agreement with Medigus, whereby the parties agreed to convert, at a conversion price of $ 4.356 , an outstanding line of credit previously extended by Medigus to the ScoutCam, which as of the Conversion Date was $ 381,136 , into (a) 87,497 shares of the Company’s common stock, (b) warrants to purchase 43,749 shares of common stock with an exercise price of $ 5.355 (Warrant A), and (c) warrants to purchase 87,497 shares of common stock with an exercise price of $ 8.037 (Warrant B). As the conversion price represented the same unit price as in the March 2020 and May 2020 private placements, no finance expenses have been recorded in statement of operations as a result of the conversion. Each Warrant A is exercisable into one share of common stock of the Company at an exercise price of USD 5.355 per share during the 12 months period following the allocation. Each Warrant B is exercisable into one share of common stock of the Company at an exercise price of USD 8.037 per share during the 18 months period following the allocation. During June 2021, all Warrants A were exercised. e. On March 22, 2021, the Company undertook to issue to certain investors (the “Investors”) 2,469,156 units (the “Units”) in exchange for an aggregate purchase price of $ 20 million. Each Unit consists of (i) one share of the Company’s common stock and (ii) one warrant to purchase one share of common stock with an exercise price of USD 10.35 per share (the “Warrant March 2021” and the “Exercise Price”). Each Warrant is exercisable until the close of business on March 31, 2026 . Pursuant to the terms of the Warrant March 2021, following April 1, 2024, if the closing price of the common stock equals or exceeds 135% of the 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 the Investors a notice of forced exercise. As of June 30, 2021, the Company had the following outstanding warrants to purchase common stock : SCHEDULE OF STOCK WARRANTS OUTSTANDING TO PURCHASE COMMON STOCK Warrant Issuance Date Expiration Date Exercise Price Per Share ($) Number of Shares of common stock Underlying Warrants Medigus Warrant December 30, 2019 December 30, 2022 - (*) 298,722 Warrant B March 3, 2020 September 3, 2021 8.037 217,727 Warrant A May 18, 2020 November 18, 2021 5.355 192,220 Warrant B May 18, 2020 May 18, 2022 8.037 459,137 Warrant B June 23, 2020 December 23, 2021 8.037 87,497 Warrant March 2021 March 29, 2021 March 31, 2026 10.350 2,469,156 3,724,459 (*) If ScoutCam achieves an aggregate amount of $33 million in sales within the first three years immediately after the Exchange Agreement, the Company will issue to Medigus 298,722 shares of the Company’s common stock, which represents 10 % of the Company’s issued and outstanding share capital as of the Exchange Agreement. - 15 - SCOUTCAM INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 4 – EQUITY (continued): Share-based compensation to employees, directors and service providers: In February 2020, the Company’s Board of Directors approved the 2020 Share Incentive Plan (the “Plan”). The 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 Company’s option pool pursuant to the Plan by an additional 64,099 shares of Common Stock. On June 22, 2020, the Company’s Board of Directors approved an increase to the Company’s option pool pursuant to the Plan 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 Company’s option pool pursuant to the Plan by an additional 777,778 shares of common stock. The Plan is designed to enable the Company to grant options to purchase ordinary shares and RSUs under various and different tax regimes including, without limitation: (i) pursuant and subject to Section 102 of the Israeli Tax Ordinance or any provision which may amend or replace it and any regulations, rules, orders or procedures promulgated thereunder and to designate them as either grants made through a trustee or not through a trustee; and (ii) pursuant and subject to Section 3(i) of the Israeli Tax Ordinance. During the six months ended June 30, 2021, the Company granted 567,687 options pursuant to the 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 SHARE-BASED PAYMENT AWARD, STOCK OPTIONS, VALUATION ASSUMPTIONS Six months ended June 30, 2021 Underlying value of ordinary shares ($) 7.65 - 10.35 Exercise price ($) 2.61 - 7.20 Expected volatility (%) 45.80 % - 47.44 % Term of the options (years) 7 Risk-free interest rate 0.78 %- 1.33 % The cost of the benefit embodied in the options granted during the six months ended June 30, 2021, based on their fair value as at the grant date, is estimated to be approximately $ 3,784 thousands. These amounts will be recognized in statements of operations over the vesting period. - 16 - SCOUTCAM INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 4 – EQUITY (continued): The following table summarizes stock option activity for the six months ended June 30, 2021: SCHEDULE OF STOCK OPTIONS ACTIVITY For the Six months ended June 30, 2021 Amount of options Weighted average exercise price $ Outstanding at beginning of period 737,049 2.61 Granted 567,687 4.09 Cancelled ( 87,934 ) 2.61 Outstanding at end of period 1,216,802 3.30 Vested at end of period 349,095 2.61 The following table sets forth the total share-based payment expenses resulting from options granted, included in the statements of operation: SCHEDULE OF TOTAL SHARE-BASED PAYMENT EXPENSES Six months ended June 30, 2021 USD in thousands Cost of revenues 9 Research and development 165 Sales and marketing 11 General and administrative 450 Total expenses 635 - 17 - SCOUTCAM INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 5 – REVENUES : Contract fulfillment assets and Contract liabilities: The Company’s contract fulfillment assets and contract liabilities as of June 30, 2021 and December 31, 2020 were as follows: SCHEDULE OF CONTRACT LIABILITIES June 30, December 31, 2021 2020 USD in thousands Contract fulfillment assets 1,510 1,130 Contract liabilities 1,385 848 Remaining Performance Obligations Remaining Performance Obligations (“RPO”) represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. As of June 30, 2021, the total RPO amounted to $ 2.7 million, which the Company expects to recognize over the expected manufacturing term of the product under development. NOTE 6 – INVENTORY : Composed as follows: SCHEDULE OF INVENTORY June 30, December 31, 2021 2020 USD in thousands Raw materials and supplies 145 45 Finished goods - 278 Inventory write downs - ( 79 ) Inventory net 145 244 During the period ended June 30, 2021, no impairment occurred. - 18 - SCOUTCAM INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 7 – LOSS PER SHARE Basic loss per share is computed by dividing 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 8 – RELATED PARTIES On May 30, 2019, ScoutCam Ltd. entered into an intercompany agreement with Medigus (the “Intercompany Agreement”) according to which ScoutCam Ltd. agreed to hire and retain certain services from Medigus. The agreed upon services provided under the Intercompany Agreement included: (1) lease of office space and clean room based on actual space utilized by ScoutCam Ltd. and in shared spaces according to employee ratio; (2) utilities such as electricity water, IT and communication services based on employee ratio; (3) car services, including car rental, gas usage, payment for toll roads based on 100% of expense incurred from a ScoutCam Ltd. employee car; (4) external accountant services at a price of USD 6,000 per annum; (5) directors and officers insurance at a sum of 1/3 of Medigus cost; (6) CFO services at a sum of 50% of Medigus company CFO employer cost; (7) every direct expense of ScoutCam Ltd. that is paid by Medigus in its entirety subject to approval of such direct expenses in advance; and (8) any other mutual expense that is borne by the parties according to the Respective portion of the Mutual Expense In addition, ScoutCam Ltd.’s employees provide support services to Medigus. On April 20, 2020, ScoutCam Ltd. entered into an amended and restated intercompany services agreement with Medigus. Balances with related parties : SCHEDULE OF BALANCES WITH RELATED PARTIES June 30, 2021 December 31, 2020 Medigus receivable - 47 Medigus payable 13 - NOTE 9 – SUBSEQUENT EVENTS 1. On August 9, 2021, the Company amended its Articles of Incorporation to effect a 9 to 1 reverse stock split of the Company’s outstanding Common Stock. As a result of the reverse stock split, which became effective on August 9, 2021, every 9 shares of the Company’s outstanding Common Stock prior to the effect of that amendment was combined and reclassified into one share of the Company’s Common Stock. No fractional shares were issued in connection with or following the reverse split. The number of authorized capital of the Company’s Common Stock and par value of the shares remained unchanged. All share, stock option and per share information in these condensed consolidated financial statements have been adjusted to reflect the stock split on a retroactive basis. 2. On July 27, 2021, certain of the Company’s stockholders representing more than 50% of the Company’s outstanding share capital as of July 7, 2021 approved an additional amendment to the Company’s Articles of Incorporation (the “Staggered Board Certificate of Amendment”) in order to effect the implementation of a staggered board structure. - 19 - 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, 2020. 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, 2020 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 . Overview The Company’s primary business activity during last few months was the completion of R&D in connection with a customer-specific project and the transition to the production stage with respect to a contract with a Fortune 500 Multinational Healthcare Corporation, while expanding the R&D team to enable additional projects in parallel. The main effect of this activity was the increase in the number of employees to enable the Company to manage the anticipated increased workload. In addition, the Company has enlarged its focus on I4.0 activities. Other major activities were the following: - expanding marketing activities, including the recruitment of a Director of Business Development in the US, and launching a multi-platform digital marketing campaign; - extensive activity in connection with the Company’s IP, including submissions of new patent applications as well as maintenance, defense, and commercialization efforts of existing patents; - increased operation expenses in order to improve the current Company’s R&D capabilities; - increase in research and development activities, including the development of new products and the improvement of existing technology, and the examination of additional applications for our micro ScoutCam™ portfolio outside of the medical, defense and aerospace fields, including sectors such as, inter alia, automotive, industrial non-destructing-testing industries, and predictive maintenance (i.e. Industry 4.0) based on Internet of Things (IoT); and - investment in capital expenses to provide the necessary facilities, IT, and lab tools for our newly recruited employees and to upgrade the Company’s production and quality control capabilities. Comparison of the six months ended June 30, 2021 and 2020 The following table summarizes our results of operations for the six months period ended June 30, 2021, and 2020, together with the changes in those items in dollars and as a percentage: Six months ended June 30, 2021 2020 % Change Revenues 298,000 74,000 303 % Cost of Revenues 610,000 281,000 117 % Gross Loss (312,000 ) (207,000 ) 51 % Research and development expenses 754,000 370,000 104 % Sales and marketing expense 293,000 188,000 56 % General and administrative expenses 2,328,000 1,680,000 39 % Operating Loss (3,687,000 ) (2,445,000 ) 51 % - 20 - Revenues For the six months ended June 30, 2021, we generated revenues of $298,000, an increase of $224,000 from the six months ended June 30, 2020. The increase in revenues was primarily due to revenues from A.M. Surgical. Total revenues recorded from A.M. Surgical during the six months ended June 30, 2021 amounted to approximately $200,000. We did not record any revenue from A.M. Surgical during the six months ended June 30, 2020. Cost of Revenues Cost of revenues for the six months ended June 30, 2021 was $610,000, an increase of $329,000 compared to cost of revenues of $281,000 for the six months ended June 30, 2020. The increase was primarily due to an increase in materials as a result of an increase in revenues and an increase in payroll expenses as a result of hiring additional employees as part of the transition to the production stage with respect to a contract with a Fortune 500 Multinational Healthcare Corporation. Gross Loss Gross loss for the six months ended June 30, 2021, was $312,000, an increase of $105,000 compared to gross loss of $207,000 for the six months ended June 30, 2020. Research and Development Expenses Research and development expenses for the six months ended June 30, 2021 were $754,000, an increase of $384,000, or 104%, compared to $370,000 for the six months ended June 30, 2020. The increase was primarily due to (i) an increase in payroll expenses and materials and subcontractors and (ii) an increase in research and development activities, including the development of new products and the improvement of existing technology. We recently begun examining additional applications for our micro ScoutCam™ portfolio outside of the medical, defense and aerospace fields, including sectors such as, inter alia, automotive, industrial non-destructing-testing industries, and predictive maintenance (i.e. Industry 4.0) based on Internet of Things (IoT). We plan to further expand the activity in these non-medical spaces. We expect that our research and development expenses will increase as we continue to develop our products and service and recruit additional research and development employees to the I4.0 domain. - 21 - Sales and Marketing Expenses Sales and marketing expenses for the six months ended June 30, 2021, were $293,000, an increase of $105,000, or 56%, compared to $188,000 for the six months ended June 30, 2020. The increase was primarily due to an expanding marketing activity, including the recruitment of a Director of Business Development in the US, and launching a multi-platform digital marketing campaign. We expect that our selling and marketing expenses will increase as we continue to increase our selling and marketing efforts. General and Administrative Expenses General and Administrative expenses for the six months ended June 30, 2021 were $2,328,000, an increase of $648,000, or 39%, compared to $1,680,000 for the six months ended June 30, 2020. The increase was primarily due to: ● an increase in in payroll expenses due to the hiring of additional employees including a new CEO, controller and the shift in the position of the CFO from part-time to full-time; ● An increase in IP expenses due to maintenance, defense, and commercialization efforts of existing patents. Operating loss We incurred an operating loss of $3,687,000 for the six months ended June 30, 2021, an increase of $1,242,000, or 51%, compared to operating loss of $2,445,000 for the six months ended June 30, 2020. The increase in operating loss was due to $105,000 increase in gross loss, $384,000 increase in research and development expenses, and $105,000 increase in sales and marketing expenses and $648,000 increase in administrative and general expenses. Cash Flows The following table sets forth the significant sources and uses of cash for the periods set forth below (in dollars): Six month ended June 30, 2021 2020 Cash used in Operating Activity (3,054,000 ) (2,277,000 ) Cash used in Investing Activity (170,000 ) (221,000 ) Cash provided by Financing Activity 21,622,000 2,777,000 - 22 - Operating Activities For the six months ended June 30, 2021, net cash flows used in operating activities was $3,054,000, due primarily to a net loss of $3,694,000, partially offset by share based compensation of $635,000. Investing Activities For the six months ended June 30, 2021, net cash flows used in investing activities was $170,000, due to the purchase of property and equipment. Financing Activities For the six months ended June 30, 2021, net cash flows provided by financing activities was $21,622,000, due to proceeds from the issuance of shares and warrants equivalent to approximately $19,118,000 and proceeds from exercise from warrants of approximately $2,504,000. Comparison of the three months ended June 30, 2021 and 2020 The following table summarizes our results of operations for the three months period ended June 30, 2021, and 2020, together with the changes in those items in dollars and as a percentage: Three months ended June 30, 2021 2020 % Change Revenues 274,000 34,000 706 % Cost of Revenues 407,000 151,000 170 % Gross Loss (133,000 ) (117,000 ) 14 % Research and development expenses 421,000 115,000 266 % Sales and marketing expense 148,000 136,000 9 % General and administrative expenses 1,395,000 568,000 146 % Operating Loss (2,097,000 ) (936,000 ) 124 % Revenues For the three months ended June 30, 2021, we generated revenues of $274,000, an increase of $240,000 from the three months ended June 30, 2020. The increase in revenues was primarily due to revenues from A.M. Surgical. Total revenues recorded from A.M. Surgical during the three month ended June 30, 2021 amounted to approximately $200,000. We did not record any revenue from A.M. Surgical during the three months ended June 30, 2020. Cost of Revenues Cost of revenues for the three months ended June 30, 2021, was $407,000, an increase of $256,000 compared to cost of revenues of $151,000 for the three months ended June 30, 2020. The increase was primarily due to an increase in materials as a result of an increase in revenues and an increase in payroll expenses as a result of hiring additional employees as part of the transition to the production stage with respect to a contract with a Fortune 500 Multinational Healthcare Corporation. Gross Loss Gross loss for the three months ended June 30, 2021, was $133,000, an increase of $16,000 compared to gross loss of $117,000 for the three months ended June 30, 2020. - 23 - Research and Development Expenses Research and development expenses for the three months ended June 30, 2021 were $421,000, an increase of $306,000, or 266%, compared to $115,000 for the three months ended June 30, 2020. The increase was primarily due to (i) an increase in payroll expenses, materials and subcontractors; and (ii) an increase in research and development activities, including the development of new products and the improvement of existing technology. We recently began examining additional applications for our micro ScoutCam™ portfolio outside of the medical, defense and aerospace fields, including sectors such as automotive, industrial non-destructing-testing industries, and predictive maintenance (i.e. Industry 4.0) based on Internet of Things (IoT). We plan to further expand the activity in these non-medical spaces. We expect that our research and development expenses will increase as we continue to develop our products and service, and recruit additional research and development employees. Sales and Marketing Expenses Sales and marketing expenses for the three months ended June 30, 2021 were $148,000, an increase of $12,000, or 9%, compared to $136,000 for the three months ended June 30, 2020. General and Administrative Expenses General and Administrative expenses for the three months ended June 30, 2021 were $1,395,000, an increase of $827,000, or 146%, compared to $568,000 for the three months ended June 30, 2020. The increase was primarily due to: ● an increase in share based compensation due to new options grants as described in Note 4 of our interim condensed financial statements as of June 30, 2021; ● an increase in in payroll expenses due to the hiring of additional employees including a new CEO and controller, and an increase due to the transition of our CFO from part-time to full-time; and ● An increase in IP expenses due to maintenance, defense, and commercialization efforts of existing patents. Operating loss We incurred an operating loss of $2,097,000 for the three months ended June 30, 2021, an increase of $1,161,000, or 124%, compared to operating loss of $936,000 for the three months ended June 30, 2020. The increase in operating loss was due to $16,000 increase in gross loss, $306,000 increase in research and development expenses, and $12,000 increase in sales and marketing expenses and $827,000 increase in administrative and general expenses. 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 June 30, 2021 2020 Cash used in Operating Activity (2,280,000 ) (1,140,000 ) Cash used in Investing Activity (53,000 ) (36,000 ) Cash provided by Financing Activity 11,341,000 1,949,000 - 24 - Operating Activities For the three months ended June 30, 2021, net cash flows used in operating activities were $2,280,000, due primarily to a net loss of $2,088,000 and change in operating asset and liabilities of approximately $698,000, partially offset by share based compensation of $556,000. Investing Activities For the three months ended June 30, 2021, net cash flows used in investing activities were $53,000, due to the purchase of property and equipment. Financing Activities For the three months ended June 30, 2021, net cash flows provided by financing activities were $11,341,000, due to proceeds from the issuance of shares and warrants equivalent to approximately $9,618,000 and proceeds from exercise from warrants of approximately $1,723,000. Future Funding Requirements The Company believes that it will require additional financing in order to provide the capital it needs to achieve its growth targets. Liquidity and Capital Resources We generated liquidity primarily from fund raising and warrant exercises as described in Note 4 of our interim condensed financial statements as of June 30, 2021. As of June 30, 2021, our total assets were $25,548,000. As of December 31, 2020, our total assets were $5,895,000. The increase of assets was mainly due to an increase of cash and cash equivalents due to fundraising activities and warrants exercise, as described in Note 4 of our interim condensed financial statements as of June 30, 2021. As of June 30, 2021, our total liabilities were $3,066,000. As of December 31, 2020, our total liabilities were $1,931,000. The increase of liabilities was mainly due to an increase of accounts payables, contract liabilities and operating lease liabilities. Since our incorporation through June 30, 2021, we incurred accumulated deficit of approximately $10 million. The management believes that our cash and cash resources as of June 30, 2021 will allow us to fund our operating plan through at least the next 12 months. However, we expect to continue to incur significant research and development expenses and other costs related to our ongoing operations; and in order to continue our future operations, we will need to obtain additional funding at least until such time that we become profitable. 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. - 25 - No change in our internal control over financial reporting, as defined in Exchange Act Rule 13a-15(e), occurred during the fiscal quarter ended June 30, 2021 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. There have been no material changes from the information set forth in “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31,2020 as filed with the SEC on March 31, 2021. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES There have been no unregistered sales of equity securities in addition to the sales provided under Form 8-K as filed with the SEC during the recent fiscal quarter ended June 30, 2021. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. MINE SAFETY DISCLOSURE Not applicable. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS. (a) The following documents are filed as exhibits to this Quarterly Report or incorporated by reference herein. Exhibit Number Description 3.1.1 Articles of Incorporation (incorporated by reference to Exhibit 3.1 to our Registration Statement on Form S-1 filed with the SEC on May 29, 2013) 3.1.2 Certificate of Amendment to the Articles of Incorporation (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the SEC on January 2, 2020) 3.1.3 Certificate of Amendment to the Articles of Incorporation, effective as of February 5, 2021 (incorporated by reference to Exhibit 3.1.3 to our Annual Report on Form 10-K filed with the SEC on March 31, 2021) 3.1.4* Amended and Restated Articles of Incorporation, effective as of August 9, 2021 3.2.1 Bylaws (incorporated by reference to Exhibit 3.2 to our Registration Statement on Form S-1 filed with the SEC on May 29, 2013) 3.2.2* Amended and Restated Bylaws 31.1* Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act 31.2* Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act 32.1** Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2** Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS Inline XBRL Instance Document 101.INS Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) * Filed herewith. ** Furnished herewith. - 26 - 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: August 12, 2021 SCOUTCAM INC. By: /s/ Yovav Sameah Name: Yovav Sameah Title: Chief Executive Officer ScoutCam Inc. By: /s/ Tanya Yosef Name: Tanya Yosef Title: Chief Financial Officer ScoutCam Inc. - 27 -