What changed in this filing

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Item 9A. Controls and Procedures

2022-03-30 compared with 2021-03-31 · 1186 added, 1525 removed, 268 unchanged (91% of the section changed)

1 unchanged sentence

Controls and Procedures

controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed

in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods

specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures

designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated

and communicated to management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar

functions, as appropriate, to allow timely decisions regarding required disclosure.

management, including our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure

controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, 2020, the end of the

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

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

controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our

reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in

the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to

ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated

to management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate,

to allow timely decisions regarding required disclosure.

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.

management is responsible for establishing and maintaining adequate internal control over financial reporting.

Our internal control over

financial reporting has been designed 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 in the United States of America.

internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable

detail, accurately and fairly reflect transactions and dispositions of our assets;

provide reasonable assurance that transactions are

recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles in the

United States of America, and that receipts and expenditures are being made only in accordance with authorization of our management and

and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition

of our assets that could have a material effect on our financial statements.

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

Also, projections

of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes

in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

evaluated the design and operating effectiveness of internal control over financial reporting based on criteria established in

Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission

(“COSO 2013”).

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.

Therefore, even those

systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because

of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the

effectiveness of our internal control over financial reporting on December 31, 2021.

In making this assessment, management used the criteria

set forth by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework, in Internal Control—Integrated

Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Based on that assessment

under those criteria, management has determined that, as of December 31, 2021, our internal control over financial reporting was effective.

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.

Management’s report was not subject to attestation by the Company’s

registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report

in this annual report on Form 10-K.

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.

Management’s report was not subject to attestation by the Company’s

registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this

annual report on Form 10-K.

in 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.

were no changes in internal control over financial reporting during the year ended December 31, 2021 that have materially affected or

are reasonably likely to materially affect the Company’s internal control over financial reporting.

Other information

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Directors, Executive Officers and corporate governance

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

Benad Goldwasser &dagger;

Donnerstein &dagger;

Yaron Silberman*

Executive Officer (outgoing)

Executive Officer (incoming)

Benad Goldwasser †

Donnerstein †

Executive Officer

Financial Officer

1 unchanged sentence

of Research and Development

of Business Development

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

Ltd.’s board of directors since its inception.

Goldwasser is a serial entrepreneur and retired urology medical doctor.

In 2016, Prof.

Goldwasser launched a venture capital fund partnered with SAIL, a Shanghai Government investment company.

Goldwasser has served as a member of the board of directors of Innoventric Ltd.

From 2013-2016 Prof.

Goldwasser served

as an external director of BioCanCell Ltd.

Goldwasser was the co-founder of Vidamed Inc., Medinol Ltd., Rita

Medical Inc., Optonol Ltd.

has served as a member of the board of directors of Innoventric Ltd.

since 2017 and Inspira Technologies Ltd.

since January 2021.

2013-2016 Prof.

Goldwasser served as an external director of BioCanCell Ltd.

Goldwasser was the co-founder of Vidamed

Inc., Medinol Ltd., Rita Medical Inc., Optonol Ltd.

and GI View Ltd.

Goldwasser served as managing director of Biomedical Investments Ltd., an Israeli

Venture Capital firm.

During his medical career, he served as Chairman of Urology at the Chaim Sheba Medical Center and Professor

of Surgery at Tel-Aviv University.

Goldwasser served as managing director of Biomedical Investments

Ltd., an Israeli Venture Capital firm.

During his medical career, he served as Chairman of Urology at the Chaim Sheba Medical Center

and Professor of Surgery at Tel-Aviv University.

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

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

Donnerstein is the chairman and owner of the

Prior to that, in 1995 Mr.

Donnerstein established Open Gallery Door Company, and in 1998 led its merger with Carmiel

Timber Plants, which Mr.

Donnerstein had acquired prior to the merger.

Donnerstein managed the combined company until 2006.

Earlier in his career, Mr.

Donnerstein was owner and CEO of Motti Sweets from 1975 until it was acquired by the Strauss Group

Donnerstein was awarded the Industry Prize from the Manufacturers’

Association of Israel.

Donnerstein has been an entrepreneur for over 40 years

and is an industry veteran.

Donnerstein’s experience includes establishing businesses in multiple industries in Europe and

Most notably, in 2008 he established Rav Bariach 08 Industries Ltd (TASE:

BRIH) after buying the assets of its predecessor in

receivership and led its turnaround to become a leading security door manufacturer worldwide.

Donnerstein currently serves as the

Executive Chairman and majority shareholder of Rav Bariach.

In addition, Mr.

Donnerstein is the Chairman of Rail Vision Ltd and, in 2014,

received the Israeli Industry Award from Israel’s Minister of Economy and Industry for his lifelong contribution to the Israeli

Industrial sector.

Rosenbloom has served as a member of our board since December 26, 2019.

Rosenbloom is an independent lawyer working out

of a self-owned law firm specializing in white collar offences.

Rosenbloom serves as chairman of the Israeli Money Laundering

Prohibition committee and the Prohibition of Money Laundering Committee of the Tel Aviv District, both of the Israel Bar Association.

Rosenbloom previously served as a police prosecutor in the Tel Aviv District.

Rosenbloom holds an LLB from the Ono Academic

College, an Israeli branch of University of Manchester.

Zilberman has served as a member of our board since December 26, 2019.

From 2007 through the end of 2016, Mr.

Zilberman also

served as a special investment advisor at Sullam Holdings L.R.

Ltd., a financial services corporation in the Lenny Recanati Group,

focusing primarily on investments in high-tech, biotechnology and real estate companies.

Zilberman also serves as a director

in other private Israeli companies, and has over 20 years of prior experience as an executive officer of various public and private

Zilberman holds a BA in economics and accounting from Tel Aviv University in Tel Aviv, Israel, and he is a certified

public accountant in Israel.

Rosenbloom is an independent lawyer working out of a

self-owned law firm specializing in white collar offences.

Rosenbloom serves as chairman of the Israeli Money Laundering Prohibition

committee and the Prohibition of Money Laundering Committee of the Tel Aviv District, both of the Israel Bar Association.

previously served as a police prosecutor in the Tel Aviv District.

He has served as a member of the board of directors of Medigus Ltd.

since August 2018.

Rosenbloom holds an LLB from the Ono Academic College, an Israeli branch of University of Manchester.

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

Since 2014, Mr.

Amit has served as a financial consultant

to multiple companies on matters related to, inter alia, mergers and acquisitions.

Amit currently serves as a member of the

board of directors for multiple Israeli public and private companies, including in the role of an external or independent director.

Amit holds both a BA in economics and accounting and an MBA from Tel-Aviv University.

Amit is a certified public accountant

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

Amit has served as a financial consultant to multiple

companies on matters related to, inter alia, mergers and acquisitions.

Amit currently serves as a member of the board of directors

for multiple Israeli public and private companies, including in the role of an external or independent director.

He has served as a member

of the board of directors of Inspira Technologies Ltd.

since June 2021.

Amit holds both a BA in economics and accounting and an MBA

from Tel-Aviv University.

Amit is a certified public accountant in Israel.

(Mori) 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.

entrepreneur and serves as the chairman of Arkin Holdings, 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 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 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.

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.

Arkin 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.

Kreiss has served on our board of directors since April 9, 2021.

Kreiss is currently the Head of Innovation at the Systems, Missiles

and Space Division of the Israeli Aerospace Industries Ltd.

(IAI) and Chairwoman of RAKIA, Israel’s 2nd Scientific and Technological

Mission to the International Space Station.

Since 2013, Ms.

Kreiss has served as Deputy Director of the Space Division at IAI, leading

the development, construction, launch and operation of observation and communication satellites for both Israeli and foreign users.

Kreiss held various leadership positions within IAI, including chief engineer of Israel’s Arrow 2 anti-ballistic missile

defense system from 2000 to 2006, and project manager of the Arrow 3 exo-atmospheric interceptor from 2007 to 2013.

a B.Sc in chemical engineering from the Technion, Israeli Institute of Technology, an Executive Masters in Business Administration from

Tel Aviv University, and completed a visiting research fellowship at the Aeronautics & Astronautics Department of the Massachusetts

Institute of Technology (MIT).

Vurembrand has served on our board of directors since May 13, 2021.

Vurembrand is currently the Chief Executive Officer and

Owner of Vurembrand Management & Innovation Ltd.

and a member of the board of directors of Isras Investment Company Ltd.

ISRS) since 2016 and of Bezeq the Israeli Telecommunication Corp.

BEZQ) since 2017.

Vurembrand has also

served as chairman of the board of Lageen Ltd.

From 2013 until 2019, Mr.

Vurembrand was the Chief Executive Officer

of Kupat Holim Meuhedet, Israel’s third largest health care organization.

From 2008 until 2013, he was the Chief Executive

Officer of Alon Holding Blue Square – Israel Ltd., and prior to that, from 2007 until 2008, he was the Chief Executive Officer

of Phoenix Investments and Finance Ltd.

Earlier in his career, from 2002 until 2007, Mr.

Vurembrand was the Chief Executive Officer

of Clalit Health Services Group, Israel’s largest health care organization.

Vurembrand has served on numerous boards of

directors, including Africa Israel Resedence LTD.

AFRE) from 2014 until 2016, Discount Bank (TASE:DSCT) 2006 until 2007,

U-Bank from 2005 until 2006, Blue Square Israel (TASE:

BSI) from 2001 until 2006, and Dikla Medical Insurance Ltd.

from 1995 until

Vurembrand has also served on the board of trustees of Bar Ilan University since 2019.

Vurembrand holds a B.Sc in

industrial engineering and management from the Technion, Israeli Institute of Technology.

Sameah has served as Chief Executive Officer of the Company since April 15, 2021.

Prior to his position with the Company, Mr.

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.

(acquired by KLA-Tencor in February of 2019).

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

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.

Yosef is a certified public accountant with many years

of experience, and held various positions with Medigus Ltd.

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.

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,

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 held various

positions at Medigus Ltd.

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

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.

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.

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

Prior to her position with ScoutCam, Ms.

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.

Dlugach 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.

Earlier in her career,

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.

Dlugach holds a B.Sc., M.Sc.

and MBA from Ben-Gurion

University, Israel.

Peled has served as our VP of Business Development since October 17, 2021.

Prior to joining ScoutCam and since 2017, Mr.

the VP Global Sales & Business Development at PointGrab.

From 2016 until 2017, Mr.

Peled was VP Business Development at imVision

Technologies.

Prior to that, Mr.

Peled held various managerial sales positions, including from 2012 until 2016 at Director of Global

Sales at Mantis Visio, and from 2010 until 2012 at Technical Sales Manager at Orckit Systems.

Peled holds a B.Sc in Electrical and

Electronic Engineering from Tel Aviv University and an MBA from Bar-Ilan University.

Priel has served as our Chief SW Architect since November 1, 2021.

Priel has over 20 years of experience in leading multidisciplinary

R&D and engineering teams in defining and navigating product development from concept to deployment, with a focus on cloud-based

architectures and AI-based technologies.

Prior to joining ScoutCam, Mr.

Priel held several senior technology positions, most recently

as CTO of Octopol from June 2019 to August 2021, where he combined state-of-the-art AI models together with cutting-edge software technology.

Prior to Octopol, Mr.

Priel served as Director of Technology at Green & Gold Analytics from March 2017 to June 2019, where he established

partnerships with Microsoft and Amazon Web Services.

Priel also previously served as VP R&D and established the Israeli Innovation

Center of Landesk (currently named Ivanti).

Priel earned both his BSc in Computer Science and Economics and MBA from Bar-Ilan University.

board of directors is divided into three classes.

Ronen Rosenbloom and Zeev Vurembrand are our Class I directors, with their terms of

office to expire at our 2022 annual meeting of stockholders.

Lior Amit, Shmuel Donnerstein and Inbal Kreiss are our Class II directors,

with their terms of office to expire at our 2023 annual meeting of stockholders.

Professor Benad Goldwasser and Moshe (Mori) Arkin are

our Class III directors, with their terms of office to expire at our 2024 annual meeting of stockholders.

At each annual meeting of stockholders,

directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding

annual meeting of stockholders after their election, with each director to hold office until his or her successor shall have been duly

elected and qualified.

board of directors may consider a broad range of factors relating to the qualifications and background of nominees to serve as director,

which may include various diversity factors.

We have no formal policy regarding board diversity.

officers hold office until the earlier of their death, resignation or removal by our board of directors or until their successors have

been selected.

They serve at the pleasure of our board of directors.

Relationships

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in Certain Legal Proceedings

our knowledge, our directors and executive officers have not been involved in any of the following events during the past ten

bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive

officer either at the time of the bankruptcy or within two years prior to that time;

conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other

minor offenses);

our knowledge, our directors and executive officers have not been involved in any of the following events during the past ten years:

bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer

either at the time of the bankruptcy or within two years prior to that time;

conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor

subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction,

permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or

banking activities or to be associated with any person practicing in banking or securities activities;

found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission to have

violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

subject of, or a party to, any federal or state judicial or administrative order, judgment decree, or finding, not subsequently

reversed, suspended or vacated, relating to an alleged violation of any federal or state securities or commodities law or

regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting

mail or wire fraud or fraud in connection with any business entity;

permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking

activities or to be associated with any person practicing in banking or securities activities;

found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission to have violated

a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

subject of, or a party to, any federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed,

suspended or vacated, relating to an alleged violation of any federal or state securities or commodities law or regulation, any law

or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or

fraud in connection with any business entity;

subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization,

any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over

its members or persons associated with a member.

any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members

or persons associated with a member.

with Section 16(a) of the Exchange Act

common stock is not registered pursuant to Section 12 of the Exchange Act.

Accordingly, our directors, officers and principal

stockholders are not subject to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act.

Accordingly, our directors, officers and principal stockholders

are not subject to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act.

currently do not have a code of ethics applicable to our principal executive officer, principal financial officer, principal accounting

officer or controller, or persons performing similar functions as required by the Sarbanes-Oxley Act of 2002 due to our small

size and limited resources and because management’s attention has been focused on matters pertaining to raising capital

and the operation of the business.

officer or controller, or persons performing similar functions as required by the Sarbanes-Oxley Act of 2002 due to our small size and

limited resources and because management’s attention has been focused on matters pertaining to raising capital and the operation

of the business.

However, we adopted a Conflict Minerals Policy that is available on our website at https://www.scoutcam.com/.

contained on, or that can be accessed through, our website does not constitute a part of this Annual Report.

our board of directors does not have any audit, nominating or compensation committees, or committees performing similar functions.

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Compensation Table

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.

following sets forth information about the compensation paid to or accrued by the company’s principal executive officer and its

two other most highly compensated persons serving as executive officers as of December 31, 2021.

These executives are referred to as

the “named executive officers.”

and Principal Position

1 unchanged sentence

Yaron Silberman,

Former Chief Executive Officer (1)

Yovav Sameah,

Executive Officer (2)

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

Chief Technology Officer (3)

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.

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

ScoutCam Ltd.

employment terminated on March 31, 2021.

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

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

employment commenced on April 15, 2021.

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

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.

Katrin Dlugach compensation earned in his capacity as the VP R&D of our wholly-owned subsidiary, ScoutCam Ltd.

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

salaries are intended to provide a level of compensation sufficient to attract and retain an effective management team, when considered

in combination with the other components of our executive compensation program.

The relative levels of base salary for our named

executive officers are designed to reflect each named executive officer’s scope of responsibility and accountability.

salary amounts include management insurance (which includes pension, disability insurance and severance pay), payments towards such

employee’s education fund, Israeli social security and amounts paid for use of a Company car.

Each named executive officer

also receives gross-up payments for the taxes on these benefits.

amounts shown in the “Option Awards” column represents

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

31, 2021 and December 31, 2020, in accordance with ASC 718, not the actual amounts paid to

or realized by the named executive officer during fiscal 2021 and fiscal 2020 .

fair value of each stock option award is estimated as of the date of grant using the Black-Scholes valuation model.

Additional information

regarding the assumptions used to estimate the fair value of all stock option awards is included in Note 9 to Consolidated Financial

a signing bonus.

and through our Israeli subsidiary, have entered into written employment agreements with each of our executive officers.

agreements contain customary provisions regarding noncompetition, confidentiality of information, and assignment of inventions.

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

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.

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, 2021.

Name and Position

1 unchanged sentence

of Securities Underlying Unexercised Options (#) Unexercisable

Exercise Price ($)

Expiration Date

Yaron Silberman,

February 12, 2027

March 31, 2022

Former Chief Executive Officer

Yovav Sameah,

Chief Executive Officer

June 22, 2027

Tanya Yosef, Chief Financial Officer

February 12, 2027

Amir Govrin, Chief Technology Officer

April 15, 2028

February 12, 2027

Katrin Dlugach, VP R&D

Chief Technology Officer

Katrin Dlugach

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;

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.

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

do not have any arrangements or plans that provide for the payment of retirement or similar benefits to our directors or executive

do not have any arrangements or plans that provide for the payment of retirement or similar benefits to our directors or executive officers.

Retirement, Other Termination, or Change in Control Arrangements

have no contract, agreement, plan or arrangement, whether written or unwritten, that provides for payments to our directors or

executive officers at, following, or in connection with the resignation, retirement or other termination of our directors or executive

officers, or a change in control of our Company or a change in our directors’

or executive officers’

responsibilities

following a change in control.

have no contract, agreement, plan or arrangement, whether written or unwritten, that provides for payments to our directors or executive

officers at, following, or in connection with the resignation, retirement or other termination of our directors or executive officers,

or a change in control of our Company or a change in our directors’ or executive officers’ responsibilities following a change

following table sets out the compensation paid to directors for services rendered during the year ended December 31, 2021.

Goldwasser (1)(2)

Fees Earned or

Option Awards (*)

$ in thousands

Benad Goldwasser

Shmuel Donnerstein

Ronen Rosenbloom

Issac Zilberman (3)

Lior Amit (3)

Irit Yaniv (4) (5)

Moshe (Mori) Arkin (1)

Inbal Kreiss (2)

Zeev Vurembrand (3)

as a director of ScoutCam Inc.

on December 26, 2019, and served as Chairman of the Board of Directors of our wholly-owned

subsidiary, ScoutCam Ltd., since its inception.

July 31, 2019, ScoutCam Ltd.

Benad Goldwasser entered into a consulting agreement, whereby Prof.

Goldwasser agreed

to serve as chairman of the board of directors of ScoutCam Ltd., effective retroactively to March 1, 2019, in consideration

for, inter alia , a monthly fee of $10,000 and options representing 5% of our fully-diluted share capital as of the

Closing Date.

on February 15, 2021.

as a director of ScoutCam Inc.

on December 26, 2019.

on April 9, 2021.

as a director of ScoutCam Inc.

on May 13, 2021.

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.

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

31, 2021, based on the option’s fair value, calculated in accordance with accounting guidance for equity-based compensation.

March 15, 2020, our board of directors approved a quarterly fee of $4,000 payable to each of our currently serving directors, excluding

Professor Benad Goldwasser.

On each of April, 9, 2021 and August 12, 2021, our board of directors approved the same terms for directors

appointed subsequent to March 15, 2020.

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 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.

table below provides information regarding the beneficial ownership of our common stock as of March 28, 2022, 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 7,121,737 shares of common stock outstanding as of March 28, 2022.

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

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, 2022.

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 and 3B, Industrial

Box 3030, Omer, Israel 8496500.

and Address of Beneficial Owner

Name and Address of Beneficial Owner

Amount and Nature

of Beneficial

Ownership (1)

Percent of Class

Benad Goldwasser (2)

1 unchanged sentence

Ronen Rosenbloom (4)

Isaac Zilberman (5)

Lior Amit (5)

Inbal Kreiss (6)

Moshe (Mori) Arkin (7)

Yaron Silberman (8)

Zeev Vurembrand

Yovav Sameah (8)

Tanya Yosef (9)

2 unchanged sentences

Directors and officers as a group (13 individuals)

The More Group (12)

The Phoenix Holdings (13)

The Meitav Dash Group (14)

Noked Long Limited Partnership

Less than 1%.

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

to securities.

Each of the beneficial owners named in the table have, to our knowledge, direct ownership of and sole voting

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

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.

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

Each of the beneficial owners named in the table have, to our knowledge, direct ownership of and sole voting and investment

power with respect to the shares of common stock beneficially owned by them.

options to purchase 316,898 shares of common stock which are currently exercisable or will become exercisable within 60 days of March

options to purchase 32,890 shares of common stock which are currently exercisable or will become exercisable within 60 days of March

options to purchase 12,534 shares of common stock which are currently exercisable or will become exercisable within 60 days of March

options to purchase 20,546 shares of common stock which are currently exercisable or will become exercisable within 60 days of March

options to purchase 5,341 shares of common stock which are currently exercisable or will become exercisable within 60 days of March

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.

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.

Arkin (1999) Ltd.

warrants to purchase 681,360 shares of common stock and options to purchase 8,527 shares of common stock which are currently exercisable

or will become exercisable within 60 days of March 28, 2022.

options to purchase 66,988 shares of common stock which are currently exercisable or will become exercisable within 60 days of March

options to purchase 28,131 shares of common stock which are currently exercisable or will become exercisable within 60 days of March

options to purchase 53,116 shares of common stock which are currently exercisable or will become exercisable within 60 days of March

options to purchase 29,059 shares of common stock which are currently exercisable or will become exercisable within 60 days of March

on information provided to or available to the Company, consists of warrants to purchase 470,159 shares of common stock.

address of the More Group is BSR Tower 1, 2 Ben Gurion Street, Ramat Gan, Israel.

on the Schedule 13G/A filed by The Phoenix Holdings with the SEC on February 7, 2022 and information provided to or available to

the Company, consists of 679,013 warrants to purchase shares of common stock, which are currently exercisable or will become exercisable

within 60 days of March 28, 2022.

The business address of the Phoenix Holdings Ltd.

is Derech Hashalom 53, Givataim 53454, Israel.

on information provided to or available to the Company, consists of warrants to purchase 445,750 shares of common stock.

on information provided to or available to the Company, consists of warrants to purchase shares 185,185 of common stock.

business address of Noked Long Limited Partnership is 30 Haarbaa’a street, Tel Aviv, Israel

Certain relationships and related transactions, and director independence

Party Transactions

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

for an aggregate amount of $720,000.

July 31, 2019, ScoutCam Ltd.

Benad Goldwasser entered into a consulting agreement, whereby Prof.

Goldwasser agreed to

serve as chairman of the board of directors of ScoutCam Ltd., effective retroactively to March 1, 2019, in consideration for,

inter alia , a monthly fee of $10,000 and options representing 5% of our fully-diluted share capital as of the Closing Date.

August 27, 2019, Medigus provided ScoutCam Ltd.

with a line of credit in the aggregate amount of US$500,000, and, in exchange,

ScoutCam Ltd.

granted Medigus a capital note that bears an annual interest rate of 4%.

The repayment of the credit line amount

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.

and Medigus dated May 28, 2019 became effective,

whereby, inter alia , ScoutCam Ltd.

transferred certain assets to Medigus representing an aggregate amount of $168,000.

Under the terms of the Amended and Restated Asset Transfer Agreement, Medigus transferred certain intellectual property rights

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.

and Shrem Zilberman Group Ltd.

(the “Consultant”) entered into a consulting agreement

whereby in exchange for certain consulting services, the Consultant received, among other things, an aggregate flat fee of $165,000

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 (the “Purchase Agreement”).

Additionally, in the event the total proceeds received as a result of exercise of warrants issued in connection with the Purchase

Agreement will be less than $2 million at the time of their expiration, the Consultant will be required to invest $250,000

in the Company.

March 15, 2020, the Company’s Board of Directors approved, among other things, a quarterly fee of $4,000 payable to each

of the Company’s currently serving directors, excluding Professor Benad Goldwasser.

April 20, 2020, Medigus and ScoutCam Ltd.

entered into that certain Intercompany Services Agreement, which amended and restated

the intercompany services agreement executed between the parties on May 30, 2019.

The agreement has an initial term of one year,

and renews automatically for additional one-year periods, unless either party provides 60 (sixty) days written notice of non renewal.

Either Medigus or ScoutCam Ltd.

may terminate the agreement for convenience upon providing 60 (sixty) days prior written notice.

The services to be provided by ScoutCam Ltd.

include, inter alia, the provision of office space, utilities, car services, insurance

and chief financial officer services.

In consideration for the foregoing services, ScoutCam Ltd.

is entitled to arm’s length

service fees based on the most recent transfer pricing analysis as performed by an external expert, which may be adjusted from

time to time.

May 18, 2020, in connection with the Arkin Transaction (as defined below), the Company, Medigus and Arkin (as defined below),

entered into the Letter Agreement, whereby, provided the Company obtains certain regulatory approvals described therein, Medigus

and the Company agreed to amend certain terms of the Amended and Restated Asset Transfer Agreement and the License Agreement,

thereby transferring outright certain patent assets from Medigus to the Company;

provided, however, that in the event the Company

neglects the foregoing patent assets, the Company must transfer back ownership of the patent assets to Medigus for no additional

consideration and absent any additional contingencies.

on May 18, 2020, and in connection with the Arkin Transaction, the Company, Medigus and Arkin entered into a Voting Agreement,

pursuant to which Arkin and Medigus each agreed to vote their respective shares of Common Stock in favor of the election of the

opposite party’s designated representative(s), as applicable, to the Board.

Each of Arkin’s and Medigus’

under the Voting Agreement are contingent upon, inter alia, such party maintaining a certain beneficial ownership threshold in

the Company, as defined therein.

June 23, 2020, the Company and Medigus entered into a certain Conversion Side Letter, pursuant to which the Company converted

US$381,136 worth of outstanding credit previously extended by Medigus to the Company, which amount, as of the date thereof, included

interest accrued thereon.

In accordance with the terms of the Conversion Side Letter, the Company issued to Medigus, at a purchase

price of US$0.968, (a) 787,471 shares of Common Stock, (b) warrants to purchase 393,736 shares of Common Stock at an exercise

price of US$0.595, and (c) warrants to purchase 787,471 shares of Common Stock at an exercise price of US$0.893.

November 2020, the Company and certain of warrant holders, including Professor Benad Goldwasser and M.

Arkin (1999) Ltd., executed

an amendment to warrants issued in connection with the Purchase Agreement, pursuant to which the parties agreed to remove the

restrictions on transferability originally imposed on said warrants.

As of December 31, 2020, warrants to purchase 902,271

shares of Common Stock were transferred in accordance with the foregoing amendment.

2020, the Company’s Board of Directors authorized the allotment of options to purchase 2,863,854 shares of Common Stock

Benad Goldwasser, our Chairman of the Board, and an aggregate of 3,625,318 options to purchase shares of Common Stock

to additional directors and certain officers of the Company.

See also note 9 to our financial statements for year ended December

entered into an Intercompany Services Agreement, which amended and restated the intercompany

services agreement executed between the parties on May 30, 2019.

The agreement has an initial term of one year, and renews automatically

for additional one-year periods, unless either party provides 60 (sixty) days written notice of non renewal.

Either Medigus or ScoutCam

may terminate the agreement for convenience upon providing 60 days prior written notice.

The services to be provided by ScoutCam

include the provision of office space, utilities, car services, insurance, and chief financial officer services.

In consideration

for the foregoing services, ScoutCam Ltd.

is entitled to arm’s length service fees based on the most recent transfer pricing analysis

as performed by an external expert, which may be adjusted from time to time.

On March 22, 2022, ScoutCam Ltd.

provided prior written

notice to Medigus of termination of the Intercompany Services Agreement effective May 21, 2022.

May 18, 2020, we entered into and consummated a securities purchase agreement with M.

Arkin (1999) Ltd.

(“Arkin Ltd.”) in

connection with the sale and issuance of 229,569 units (“Arkin Units”), at a purchase price of $8.712 per Arkin Unit, and

for an aggregate purchase price of $2,000,000 (the “Arkin Transaction”).

Each Arkin Unit consists of:

(i) two shares of common

stock and (ii) (a) one warrant to purchase one share of common stock with an exercise price of $5.355 (“Arkin Warrant A”)

and (b) two warrants, each to purchase one share of common stock with an exercise price of $8.037 (“Arkin Warrant B”, and

together with Arkin Warrant A, the “Arkin Warrants”).

The shares of common stock and Arkin Warrants were issued to Arkin

pursuant to Regulation S of the Securities Act of 1933, as amended.

on May 18, 2020, and in connection with the Arkin Transaction, we, Medigus and Arkin Ltd.

entered into a Voting Agreement, pursuant to

which Arkin Ltd.

and Medigus each agreed to vote their respective shares of common stock in favor of the election of the opposite party’s

designated representative(s), as applicable, to our board of directors.

Each of Arkin Ltd.’s and Medigus’ rights under the

Voting Agreement are contingent upon, inter alia, such party maintaining certain beneficial ownership thresholds in our company.

on May 18, 2020, in connection with the Arkin Transaction, we, Medigus and Arkin, entered into the Letter Agreement, whereby, provided

that we obtain certain regulatory approvals described therein, we and Medigus agreed to amend certain terms of the Amended and Restated

Asset Transfer Agreement and the License Agreement, thereby transferring outright certain patent assets from Medigus to us;

however, that in the event that we neglect the foregoing patent assets, we must transfer back ownership of the patent assets to Medigus

for no additional consideration and absent any additional contingencies.

On July 27, 2020, Medigus and ScoutCam Ltd.

entered into each

of the Addendum No.

1 to the Amended and Restated Asset Transfer Agreement, or the Addendum, and the Patent License Agreement Termination,

in order to reflect and effect the amendments agreed upon in the Letter Agreement.

June 23, 2020, we and Medigus entered into a Conversion Side Letter, pursuant to which Medigus converted $381,136 worth of outstanding

credit previously extended to us, including interest by Medigus, into (a) 87,497 shares of our common stock, (b) warrants to purchase

43,749 shares of common stock at an exercise price of $5.355, and (c) warrants to purchase 87,497 shares of our common stock at an exercise

price of $8.037.

November 2020, we and certain of our warrant holders, including Professor Benad Goldwasser and Arkin Ltd., executed an amendment in connection

with previously issued warrants to purchase shares of common stock, pursuant to which the parties agreed to remove the restrictions on

transferability originally imposed on such warrants.

As of December 31, 2020, warrants to purchase 100,257 shares of common stock were

transferred in accordance with the foregoing amendment.

on January 1, 2021 and as of the date hereof, our board of directors authorized the allotment of options and RSU to purchase 128,334

shares of common stock to Prof.

Benad Goldwasser and an aggregate of 501,842 options to purchase shares of common stock to additional

directors and certain officers of our company.

March 29, 2021, we issued to certain investors, including M.

Arkin (1999) Ltd., a major stockholder of our company, of which Mori Arkin,

a director of our company, is the owner, 2,469,156 units in exchange for an aggregate purchase price of $20 million.

Each such unit consists

of (i) one share of common stock and (ii) one warrant to purchase one share of common stock with an exercise price of $10.35 per share.

Each such warrant is exercisable until the close of business on March 31, 2026.

to the terms of the foregoing warrants, following April 1, 2024, if the closing price of our the 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, we may force the exercise of

the warrants, in whole or in part, by delivering to these investors a notice of forced exercise.

The shares of common stock and the warrants

were issued to such investors pursuant to Regulation S of the Securities Act of 1933, as amended.

The securities issued in connection

with the foregoing investment were registered by us for resale under a registration statement on Form S-1 declared effective on May 10,

and Procedures for Related Party Transactions

3 unchanged sentences

We intend to establish formal policies and procedures in the future, once we have sufficient resources and have appointed additional

directors, so that such transactions will be subject to the review, approval or ratification of our board of directors, or an

appropriate committee thereof.

currently have two independent directors on our board of directors, Professor Benad Goldwasser and Mr.

Shmuel Donnerstein.

directors, so that such transactions will be subject to the review, approval, or ratification of our board of directors, or an appropriate

committee thereof.

board of directors has determined that Professor Benad Goldwasser, Mr.

Shmuel Donnerstein, Ms.

Inbal Kreiss, Mr.

Lior Amit and Mr.

Vurembrand do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities

of a director and that each of these directors is “independent”.

are not currently subject to listing requirements of any national securities exchange, which generally stipulates certain requirements

that a majority of a company’s board of directors be classified as “independent”.

As a result, we are not at

this time required to have our board of directors comprised of a majority of “independent directors”.

Notwithstanding

the foregoing, we have voluntarily adopted the definition of “independent”

as defined under Nasdaq Rule 5605(a)(2),

and believe Professor Goldwasser and Mr.

Donnerstein qualify accordingly.

that a majority of a company’s board of directors be classified as “independent”.

As a result, we are not at this time

required to have our board of directors comprised of a majority of “independent directors”.

Notwithstanding the foregoing,

we have voluntarily adopted the definition of “independent” as defined under Nasdaq Rule 5605(a)(2), and believe Professor

Goldwasser, Mr.

Donnerstein, Ms.

Vurembrand qualify accordingly.

Principal accounting fees and services

Public Accounting Firm

February 9, 2020, the Registrant’s board of directors appointed Kesselman & Kesselman, a member of PricwaterhouseCoopers

International Limited as the Registrant’s independent public accounting firm for the fiscal year ended December 31, 2019.

MaloneBailey LLP served as the Registrant’s independent public accounting firm since 2013.

May 24, 2020, the Board of Directors resolved to replace Kesselman & Kesselman, a member of PricewaterhouseCoopers

International Limited, with Brightman Almagor Zohar & Co., a firm in the Deloitte global network, to serve as

the Company’s new independent registered public accounting firm for the fiscal year ending December 31, 2020.

and Accounting Fees

following table sets forth the fees billed to our Company for professional services rendered by (i) MaloneBailey LLP, an independent

registered public accounting firm, for the fiscal year-ended December 31, 2019, and the fiscal year ended March 31, 2019, (ii)

Kesselman & Kesselman, a member of PricwaterhouseCoopers International Limited for the fiscal year ended December 31, 2019,

and (iii) Brightman Almagor Zohar & Co., a firm in the Deloitte global network for the fiscal year ended December 31, 2020:

Ended December 31,

following table sets forth the fees billed to our Company for professional services rendered by Brightman Almagor Zohar & Co., a

firm in the Deloitte global network, and Kesselman & Kesselman, a member of PricwaterhouseCoopers International Limited,

for the fiscal years ended December 31, 2020 and December 31, 2021:

December 31, 2021

December 31, 2020

$ in thousands

Audit fees (1)

All other fees

fees consist of audit and review services, consents and review of documents filed with the SEC.

Fees consists of $16 thousands in connection with the services rendered by MaloneBailey LLP, and $157 thousands in connection

with the services rendered by Kesselman & Kesselman, a member of PricwaterhouseCoopers International Limited.

fees consist of preparation of federal and state tax returns.

fees consist of fees for professional services rendered for the audit of our annual financial statements and review of financial

statements included in our quarterly reports on Form 10-Q.

fees consist of audit and review services, consents and review of documents filed with the

fees consist of services related to representing the Company before the Israel Tax Authority

in a VAT assessment.

Fees consists of $123,000 in connection with the services rendered by Brightman Almagor

Zohar & Co., a firm in the Deloitte global network, and $117,000 in connection

with the services rendered by Kesselman & Kesselman, a member of PricwaterhouseCoopers

International Limited

Audit Fees consists of $65,000 in connection with

the services rendered by Brightman Almagor Zohar & Co., a firm in the Deloitte global network, and $105,000 in

connection with the services rendered by Kesselman & Kesselman, a member of PricwaterhouseCoopers International Limited.

Committee Administration of Engagement

have not yet established an audit committee.

Until then, there are no formal pre-approval policies and procedures with respect

to the engagement of an accountant for audit or non-audit services.

Nonetheless, the auditors engaged for these services are required

to provide and uphold estimates for the cost of services to be rendered.

Until then, there are no formal pre-approval policies and procedures with respect to the

engagement of an accountant for audit or non-audit services.

Nonetheless, the auditors engaged for these services are required to provide

and uphold estimates for the cost of services to be rendered.

exhibits, financial statement schedules

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)

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)

of Amendment to the Articles of Incorporation, effective as of February 5, 2021

(incorporated by reference to Exhibit 3.2 to our Registration Statement on Form S-1 filed with the SEC on May 29, 2013)

of the Registrant’s Securities (incorporated by reference to Exhibit 4.1 to our Annual Report on Form 10-K filed with

the SEC on March 16, 2020)

Exchange Agreement, dated September 16, 2019, by and between our Company and Medigus Ltd.

(incorporated by reference to Exhibit

10.1 to our Current Report on Form 8-K filed with the SEC on September 17, 2019)

of Securities Purchase Agreement, dated December 26, 2019, by and between our Company, ScoutCam Ltd., and certain investors

listed therein (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the SEC on December

of Escrow Agreement, dated December 26, 2019, by and between our Company, ScoutCam Ltd., Altshuler Shaham Trusts Ltd., and

those certain investors that are a party to the Securities Purchase Agreement dated December 26, 2019 (incorporated by reference

to Exhibit 10.3 to our Current Report on Form 8-K filed with the SEC on December 31, 2019)

of Warrant A by and between our Company and those certain investors that are a party to the Securities Purchase Agreement

dated December 30, 2019 (incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed with the SEC on

December 31, 2019)

of Warrant B by and between our Company and those certain investors that are a party to the Securities Purchase Agreement

dated December 30, 2019 (incorporated by reference to Exhibit 10.5 to our Current Report on Form 8-K filed with the SEC on

December 31, 2019)

of Registration Rights Agreement, dated December 26, 2019, by and between our Company and those certain investors that are

a party to the Securities Purchase Agreement dated December 26, 2019 (incorporated by reference to Exhibit 10.6 to our Current

Report on Form 8-K filed with the SEC on December 31, 2019)

and Restated Asset Transfer Agreement, by and between ScoutCam Ltd.

and Medigus Ltd., dated December 1, 2019 (incorporated

by reference to Exhibit 10.7 to our Current Report on Form 8-K filed with the SEC on December 31, 2019)

Agreement by and between ScoutCam Ltd.

Benad Goldwasser, dated July 31, 2019 (incorporated by reference to Exhibit

10.8 to our Current Report on Form 8-K filed with the SEC on December 31, 2019)

Agreement by and between ScoutCam Ltd.

and Shrem Zilberman Group Ltd., dated December 10, 2019 (incorporated by reference

to Exhibit 10.9 to our Annual Report on Form 10-K filed with the SEC on March 16, 2020)

Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1.4 to our Quarterly Report on Form 10-Q filed with the SEC on August 12, 2021)

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2.2 to our Quarterly Report on Form 10-Q filed with the SEC on August 12, 2021)

Description of the Registrant’s Securities (incorporated by reference to Exhibit 4.1 to our Annual Report on Form 10-K filed with the SEC on March 16, 2020)

Securities Exchange Agreement, dated September 16, 2019, by and between our Company and Medigus Ltd.

(incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on September 17, 2019)

Amended and Restated Asset Transfer Agreement, by and between ScoutCam Ltd.

and Medigus Ltd., dated December 1, 2019 (incorporated by reference to Exhibit 10.7 to our Current Report on Form 8-K filed with the SEC on December 31, 2019)

Consulting Agreement by and between ScoutCam Ltd.

Benad Goldwasser, dated July 31, 2019 (incorporated by reference to Exhibit 10.8 to our Current Report on Form 8-K filed with the SEC on December 31, 2019)

2020 Share Incentive Plan (incorporated by reference to Exhibit 10.10 to our Annual Report on Form 10-K filed with the SEC on March 16, 2020)

of Notice of Option Grant and Option Agreement (incorporated by reference to Exhibit 10.11 to our Annual Report on Form 10-K

filed with the SEC on March 16, 2020)

of Securities Purchase Agreement, dated March 3, 2020, by and among ScoutCam Inc.

and certain investors listed therein (incorporated

by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on March 5, 2020)

of Registration Rights Agreement, dated March 3, 2020, by and among ScoutCam Inc.

and those certain investors that are a party

to the Securities Purchase Agreement dated March 3, 2020 (incorporated by reference to Exhibit 10.2 to our Current Report

on Form 8-K filed with the SEC on March 5, 2020)

of Warrant A, by and among ScoutCam Inc.

and those certain investors that are a party to the Securities Purchase Agreement

dated March 3, 2020 (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed with the SEC on March

of Warrant B, by and among ScoutCam Inc.

and those certain investors that are a party to the Securities Purchase Agreement

dated March 3, 2020 (incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed with the SEC on March

Services Agreement, by and between Medigus Ltd.

and ScoutCam Ltd., dated May 30, 2019 (incorporated by reference to Exhibit

10.16 to our Form S-1 filed with the SEC on May 12, 2020)

and Restated Intercompany Services Agreement, by and between Medigus Ltd.

and ScoutCam Ltd., dated April 20, 2020 (incorporated

by reference to Exhibit 10.17 to our Form S-1 filed with the SEC on May 12, 2020)

License Agreement, by and between Medigus Ltd.

and ScoutCam Ltd., dated December 1, 2019*** (incorporated by reference to

Exhibit 10.18 to our Form S-1 filed with the SEC on May 12, 2020)

Agreement, by and between ScoutCam Ltd.

and Yaron Silberman, dated February 28, 2019 (incorporated by reference to Exhibit

10.19 to our Form S-1 filed with the SEC on May 12, 2020)

Agreement, by and between ScoutCam Ltd.

and Amir Govrin, dated May 1, 2019 (incorporated by reference to Exhibit 10.20 to

our Form S-1 filed with the SEC on May 12, 2020)

Agreement, by and between ScoutCam Ltd.

and Tanya Yosef, dated January 14, 2021

Form of Notice of Option Grant and Option Agreement (incorporated by reference to Exhibit 10.11 to our Annual Report on Form 10-K filed with the SEC on March 16, 2020)

Amended and Restated Intercompany Services Agreement, by and between Medigus Ltd.

and ScoutCam Ltd., dated April 20, 2020 (incorporated by reference to Exhibit 10.17 to our Form S-1 filed with the SEC on May 12, 2020)

Patent License Agreement, by and between Medigus Ltd.

and ScoutCam Ltd., dated December 1, 2019 (incorporated by reference to Exhibit 10.18 to our Form S-1 filed with the SEC on May 12, 2020)

Employment Agreement, by and between ScoutCam Ltd.

and Katrin Dlugach, dated July 1, 2019

Purchase Agreement, dated May 18, 2020, by and between ScoutCam Inc.

Arkin (1999) Ltd.

(incorporated by reference to

Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on May 19, 2020)

Rights Agreement, dated May 18, 2020, by and between ScoutCam Inc.

Arkin (1999) Ltd.

(incorporated by reference to

Exhibit 10.2 to our Current Report on Form 8-K filed with the SEC on May 19, 2020)

Agreement, dated May 18, 2020, by and among ScoutCam Inc.

and Yaron Silberman, dated February 28, 2019 (incorporated by reference to Exhibit 10.19 to our Form S-1 filed with the SEC on May 12, 2020)

Employment Agreement, by and between ScoutCam Ltd.

and Amir Govrin, dated May 1, 2019 (incorporated by reference to Exhibit 10.20 to our Form S-1 filed with the SEC on May 12, 2020)

Employment Agreement, by and between ScoutCam Ltd.

and Tanya Yosef, dated January 14, 2021 (incorporated by reference to Exhibit 10.21 to our Annual Report on Form 10-K filed with the SEC on March 31, 2021)

Employment Agreement, by and between ScoutCam Ltd.

and Katrin Dlugach, dated July 1, 2019 (incorporated by reference to Exhibit 10.22 to our Annual Report on Form 10-K filed with the SEC on March 31, 2021)

Securities Purchase Agreement, dated May 18, 2020, by and between ScoutCam Inc.

Arkin (1999) Ltd.

(incorporated by reference

to Exhibit 10.3 to our Current Report on Form 8-K filed with the SEC on May 19, 2020)

Agreement, dated May 18, 2020, by and among ScoutCam Inc., ScoutCam Ltd., Medigus Ltd.

(incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on May 19, 2020)

Voting Agreement, dated May 18, 2020, by and among ScoutCam Inc.

Arkin (1999) Ltd.

(incorporated

by reference to Exhibit 10.4 to our Current Report on Form 8-K filed with the SEC on May 19, 2020)

of Warrant A by and between ScoutCam Inc.

(incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed with the SEC on May 19, 2020)

Letter Agreement, dated May 18, 2020, by and among ScoutCam Inc., ScoutCam Ltd., Medigus Ltd.

Arkin (1999) Ltd.

(incorporated by reference to Exhibit 10.5 to our Current

Report on Form 8-K filed with the SEC on May 19, 2020)

of Warrant B by and between ScoutCam Inc.

(incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed with the SEC on May 19, 2020)

Form of Warrant B by and between ScoutCam Inc.

Arkin (1999) Ltd.

(incorporated by reference to Exhibit 10.6 to our Current

Report on Form 8-K filed with the SEC on May 19, 2020)

Letter Agreement, dated June 23, 2020, by and between ScoutCam Inc.

and Medigus Ltd.

(incorporated by reference to Exhibit

10.1 to our Current Report on Form 8-K filed with the SEC on June 24, 2020)

of Warrant A by and between ScoutCam Inc.

(incorporated by reference to Exhibit 10.6 to our Current Report on Form 8-K filed with the SEC on May 19, 2020)

1 to the Amended and Restated Asset Transfer Agreement, dated July 27, 2020, by and between ScoutCam Ltd.

and Medigus Ltd.

(incorporated by reference to Exhibit 10.2 to our Current Report

on Form 8-K filed with the SEC on June 24, 2020)

of Warrant B by and between ScoutCam Inc.

(incorporated by reference to Exhibit 10.30 to our Registration Statement on Form S-1/A filed with the SEC on October 19, 2021)

Patent License Agreement Termination, dated July 27, 2020, by and between ScoutCam Ltd.

and Medigus Ltd.

(incorporated by reference to Exhibit 10.3 to our Current Report

on Form 8-K filed with the SEC on June 24, 2020)

of Amendment to Warrant to Purchase Shares of Common Stock

Agreement, by and between Yovav Sameah and ScoutCam Ltd.

(incorporated by reference to Exhibit 10.1 to our Current Report

on Form 8-K filed with the SEC on March 8, 2021)

of the Registrant (incorporated by reference to Exhibit 21.1 to our Current Report on Form 8-K filed with the SEC on December

302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer

906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer

Instance Document

Taxonomy Extension Schema Document

Taxonomy Extension Calculation Linkbase Document

Taxonomy Extension Definition Linkbase Document

Taxonomy Extension Label Linkbase Document

Taxonomy Extension Presentation Linkbase Document

confidential information contained in this exhibit, marked by brackets, was omitted because it is both (i) not material and

(ii) would likely cause competitive harm to the Company if publicly disclosed.

“[***]”

indicates where the information

has been omitted from this exhibit.

(incorporated by reference to Exhibit 10.31 to our Registration Statement on Form S-1/A filed with the SEC on October 19, 2021)

Form of Amendment to Warrant to Purchase Shares of Common Stock (incorporated by reference to Exhibit 10.32 to our Annual Report on Form 10-K filed with the SEC on March 31, 2021)

Employment Agreement, by and between Yovav Sameah and ScoutCam Ltd.

(incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on March 8, 2021)

Purchase Order Form, between ScoutCam Inc.

and the Investors in the March 2021 Private Placement (incorporated by reference to Exhibit 10.34 to our Registration Statement on Form S-1 filed with the SEC on May 4, 2021)

Form of Warrant (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the SEC on March 24, 2021)

Employment Agreement, dated August 31, 2021, by and between ScoutCam Ltd.

and Roee Peled, (incorporated by reference to Exhibit 10.38 to our Registration Statement on Form S-1/A filed with the SEC on October 19, 2021)

Employment Agreement, dated October 26 , 2021, by and between ScoutCam Ltd.

and Arik Priel

Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 to our Current Report on Form 8-K filed with the SEC on December 31, 2019)

Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer

Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

confidential information contained in this exhibit, marked by brackets, was omitted because it is both (i) not material and (ii)

would likely cause competitive harm to the Company if publicly disclosed.

“[***]” indicates where the information has

been omitted from this exhibit

contract or compensatory plan or arrangement

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report

to be signed on its behalf by the undersigned, thereunto duly authorized.

Yaron Silberman

Statement Schedules.

Schedules have been omitted because the information required to be set out therein is not applicable or is shown

in the financial statements or notes thereto.

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized.

Executive Officer

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf

of the registrant and in the capacities and on the dates indicated.

Yaron Silberman

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the

registrant and in the capacities and on the dates indicated.

Executive Officer

5 unchanged sentences

Ronen Rosenbloom

Issac Zilberman

(Formerly known as Intellisense Solutions Inc.)

FINANCIAL STATEMENTS

(Formerly known as Intellisense Solutions Inc.)

Zeev Vurembrand

Financial Statements – in US Dollars (USD) in thousands

Balance Sheets

Statements of Operations

Statements of Changes in Shareholders’

Statements of Cash Flows

to the Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID 1197 )

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Changes in Shareholders’ Equity

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

2 unchanged sentences

have audited the accompanying consolidated balance sheets of Scoutcam Inc.

and its subsidiary (the “Company”) as of

December 31, 2020 and the related consolidated statements of operations, shareholders’

equity (capital deficiency), and

cash flows for the year ended December 31, 2020, and the related notes (collectively referred to as the “consolidated financial

statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year ended December

31, 2020, in conformity with accounting principles generally accepted in the United States of America.

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 1B to the financial statements, the Company’s accumulated losses and the additional funds needed to maintain its

operations raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these

matters are also described in Note 1B.

The financial statements do not include any adjustments that might result from the outcome

of this uncertainty.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an

opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered

with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to

the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and

Exchange Commission and the PCAOB.

and its subsidiary (the “Company”) as of December

31, 2021 and 2020, and the related consolidated statements of operations, shareholders’ equity and cash flows for each of the two years

in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company

as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended

December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on

the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company

Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether

due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over

financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting

but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

1 unchanged sentence

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis,

evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the

accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the

consolidated financial statements.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was

communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material

to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of

critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by

communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or

critical audit matter communicated below is a matter arising from the current-period audit of the consolidated financial statements that

was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material

to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication

of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are

not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or

disclosures to which it relates.

Services Revenue and Contract Liabilities –

Refer to Note 2J.

Services Revenue and Contract Liabilities – Refer to Note 2k.

and Note 10 to the consolidated financial statements

1 unchanged sentence

Company generates revenues from development services.

The Company determines at contract inception whether development services

are distinct from the performance obligation to manufacture the product under development.

Revenues from development services

that are determined as not distinct from the performance obligation to manufacture the product under development are deferred

until commencement of manufacturing and are recognized over the manufacturing term.

During 2020, all development services revenues

billed have been deferred and recorded as contract liabilities (representing the majority of the contract liabilities balance

of $848,000 as of December 31, 2020) and the respective service costs have been deferred and recorded as contract fulfillment

assets ($1,130,000 as of December 31, 2020), as the development services were determined as not distinct from the performance

obligation to manufacture the product under development.

identified the assessment of whether development services were a distinct performance obligation and the impact on the timing

of revenue recognition as a critical audit matter.

Evaluating whether development services should be accounted for separately

required judgment and increased audit effort in comparison to our audit as a whole, because of the complexity of the technical

accounting analysis and due to the magnitude of the related contract liabilities as of December 31, 2020.

The Company determines at contract inception whether development services are distinct

from the performance obligation to manufacture the product under development.

Revenues from development services that are determined

as not distinct from the performance obligation to manufacture the product under development are deferred until commencement of manufacturing

and are recognized over the manufacturing term.

During 2021, all development services revenues billed have been deferred and recorded

as contract liabilities (representing the contract liabilities balance of $2,420,000 as of December 31, 2021) and the respective service

costs have been deferred and recorded as contract fulfillment assets ($1,675,000 as of December 31, 2021), as the development services

were determined as not distinct from the performance obligation to manufacture the product under development.

identified the assessment of whether development services were a distinct performance obligation and the impact on the timing of revenue

recognition as a critical audit matter.

Evaluating whether development services should be accounted for separately required judgment

and increased audit effort in comparison to our audit as a whole, because of the complexity of the technical accounting analysis and

due to the magnitude of the related contract liabilities as of December 31, 2021.

the Critical Audit Matter Was Addressed in the Audit

audit procedures related to the Company’s determination of the performance obligations and the timing of revenue recognition

for development service contracts included the following, among others:

read the agreements and analyzed the terms of the Company’s development service contracts.

read communications between the Company and its clients relating to development services contracts.

inquired of Company research and development personnel to understand the commercial facts and circumstances relating to development

services contracts.

evaluated the Company’s interpretation and application of the relevant requirements of generally accepted accounting

principles in relation to the development services contracts and the related contract liabilities.

Almagor Zohar & Co.

audit procedures related to the Company’s determination of the performance obligations and the timing of revenue recognition for

development service contracts included the following, among others:

read the agreements and analyzed the terms of the Company’s development service contracts.

read communications between the Company and its clients relating to development services

inquired of Company research and development personnel to understand the commercial facts

and circumstances relating to development services contracts.

evaluated the Company’s interpretation and application of the relevant requirements

of generally accepted accounting principles in relation to the development services contracts

and the related contract liabilities.

Brightman Almagor Zohar & Co.

Public Accountants

Firm in the Deloitte Global Network

have served as the Company’s auditor since 2020.

of Independent Registered Public Accounting Firm

the Shareholders and Board of Directors of ScoutCam Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheet of ScoutCam Inc.

and its subsidiary (the “Company”) as of

December 31, 2019, and the related consolidated statements of operations, of changes in shareholders' equity (capital deficiency)

and of cash flows for each of the two years in the period ended December 31, 2019, including the related notes (collectively referred

to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly,

in all material respects, the financial position of the Company as of December 31, 2019, and the results of its operations and

its cash flows for each of the two years in the period ended December 31, 2019 in conformity with accounting principles generally

accepted in the United States of America.

Doubt about the Company’s Ability to Continue as a Going Concern

accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.

in Note 1(b) to the consolidated financial statements, the Company has suffered recurring losses from operations and cash outflows

from operating activities that raise substantial doubt about its ability to continue as a going concern.

Management's plans in

regard to these matters are also described in Note 1(b).

The consolidated financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an

opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered

with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to

the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and

Exchange Commission and the PCAOB.

conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.

Those standards

require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements

are free of material misstatement, whether due to error or fraud.

audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis,

evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the

accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the

consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Kesselman & Kesselman

Public Accountants (Isr.)

member firm of PricewaterhouseCoopers International Limited

served as the Company's auditor from 2019 to 2020.

(Formerly known as Intellisense Solutions Inc.)

have served as the Company’s auditor since 2020.

BALANCE SHEETS

and cash equivalents

terms deposits

current assets

Cash and cash equivalents

Accounts receivable

Receivable from

Parent Company

Other current

Total current

NON-CURRENT ASSETS:

current assets

fulfillment assets

Property and equipment, net

Operating lease right-of-use assets

Severance pay

Total non-current

Liabilities and

shareholders’

and equipment, net

lease right-of-use assets

non-current assets

and shareholders’ equity

liabilities - short term

lease liabilities - short term

compensation expenses

accrued expenses

current liabilities

Accounts payable

Contract liabilities

Operating lease liabilities - short term

Accrued compensation expenses

Loan from Parent Company

Other accrued

Total current

liabilities - long term

lease liabilities - long term

for severance pay

non-current liabilities

Operating lease liabilities - long term

Liability for

severance pay

Total non-current

TOTAL LIABILITIES

SHAREHOLDERS’

shares Common stock, $0.001 par value;

75,000,000 shares authorized, 36,756,983 and

26,884,921 shares issued and outstanding as of December 31, 2020 and 2019, respectively

Additional paid-in capital

Accumulated deficit

TOTAL SHAREHOLDERS’

TOTAL LIABILITIES

AND SHAREHOLDERS’

SHAREHOLDERS’

Common stock, $ 0.001

300,000,000 and 75,000,000 shares authorized as of December 31, 2021 and December 31, 2020, 7,121,737 and 4,084,122 shares

issued and outstanding as of December 31, 2021 and December 31, 2020, respectively

paid-in capital

SHAREHOLDERS’ EQUITY

LIABILITIES AND SHAREHOLDERS’ EQUITY

accompanying notes are an integral part of these consolidated financial statements.

(Formerly known as Intellisense Solutions Inc.)

STATEMENTS OF OPERATIONS

1 unchanged sentence

(except per share data)

REVENUES (*):

COST OF REVENUES:

GROSS PROFIT (LOSS)

RESEARCH AND DEVELOPMENT EXPENSES

SALES AND MARKETING EXPENSES

ADMINISTRATIVE EXPENSES

OPERATING LOSS

FINANCING INCOME

(EXPENSES), NET

LOSS BEFORE TAXES ON INCOME

TAXES ON INCOME

Net loss per ordinary share (basic

and diluted, in USD)

Weighted average ordinary shares (basic

and diluted, in thousands)

for revenues related to transaction with the Parent Company – see Note 11

AND DEVELOPMENT EXPENSES

AND MARKETING EXPENSES

AND ADMINISTRATIVE EXPENSES

INCOME (EXPENSES), NET

BEFORE TAXES ON INCOME

loss per share (basic and diluted, in USD)

average common shares (basic and diluted, in thousands)

accompanying notes are an integral part of these consolidated financial statements.

(Formerly known as Intellisense Solutions Inc.)

STATEMENTS OF CHANGES IN SHAREHOLDERS’

EQUITY (CAPITAL DEFICIENCY)

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

paid-in capital

Shareholders’

equity (Capital deficiency)

Balance at January 1, 2020

Issuance of shares and warrants

Shareholders’ equity

at January 1, 2021

Issuance of shares

and warrants (see note 9)

Exercise of warrants

Stock based compensation

Conversion of loan from Parent Company

Balance at December

based compensation (see note 9)

up of shares due to reverse stock split (see note 9)

Conversion of a loan from Medigus

Conversion of a loan from Medigus, shares

at December 31, 2021

paid-in capital

Company deficit

Shareholders’

equity (Capital deficiency)

Balance at January 1, 2019

Net transfer from Parent Company

Consummation of the carve-out

Capital contribution from Parent Company

Sale of assets to Parent Company

Effect of reverse recapitalization

Share based compensation

Shareholders’

at January 1, 2020

Issuance of shares

and warrants (see note 9)

Exercise of warrants

based compensation (see note 9)

of loan from Medigus (see note 8)

Balance at December

paid-in capital

Company deficit

Shareholders’

equity (Capital deficiency)

Balance at January 1,

Net transfer from Parent Company

December 31, 2018

an amount less than $1 thousand

accompanying notes are an integral part of these consolidated financial statements.

(Formerly known as Intellisense Solutions Inc.)

STATEMENTS OF CASH FLOWS

ended December 31,

CASH FLOWS FROM OPERATING

Adjustments to reconcile

net loss to net cash used in operating activities:

FLOWS FROM OPERATING ACTIVITIES:

to reconcile net loss to net cash used in operating activities:

Share based compensation

Loss (profit) from exchange differences

on cash and cash equivalents

Other non-cash items

CHANGES IN OPERATING

ASSET AND LIABILITY:

Accounts receivable

Decrease (increase)

Other current assets

Account payables

Contract fulfillment assets

Contract liability

Accrued compensation expenses

from Parent Company

Other accrued

Net cash flows used in operating activities

CASH FLOWS FROM INVESTING

Purchase of property and equipment

Change in severance

Net cash flows generated from (used

in) investing activities

CASH FLOWS FROM FINANCING

Proceeds from issuance of shares and

Proceeds from exercise of warrants

Repayment of loan from Parent Company

Transfer from Parent Company

Sale of assets to Parent Company

Capital contribution from Parent Company

Loan from Parent Company

Cash obtained

in connection with Recapitalization Transaction

Net cash flows

provided by financing activities

INCREASE IN CASH

AND CASH EQUIVALENTS

from exchange differences on cash and cash equivalents

Severance pay asset and liability

income in respect of deposits

IN OPERATING ASSET AND LIABILITY:

in accounts receivable

Increase in operating lease liability

Increase in ROU asset

in other current assets

in account payables

in contract fulfillment assets

in contract liabilities

(decrease) in accrued compensation expenses

(decrease) in Medigus receivable / payable

(decrease) in other accrued expenses

cash flows used in operating activities

FLOWS FROM INVESTING ACTIVITIES:

of property and equipment

in short terms deposits

cash flows used in investing activities

FLOWS FROM FINANCING ACTIVITIES:

from issuance of shares and warrants

Proceeds from exercise

Issuance expenses

repayment to Medigus

cash flows provided by financing activities

IN CASH AND CASH EQUIVALENTS

OF CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

(LOSSES) FROM EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS

FROM EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS

OF CASH AND CASH EQUIVALENTS AT END OF YEAR

1 unchanged sentence

ended December 31,

from Parent Company settled

against receivable from Parent Company

of a loan from Parent Company

INFORMATION FOR CASH FLOW:

acquired (liabilities assumed):

Current assets excluding cash and

cash equivalents

Current liabilities

Recapitalization Transaction costs

Reverse recapitalization

effect on equity

obtained in connection with Recapitalization Transaction

cash activities -

assets obtained in exchange for operating lease liabilities

in property and equipment through a decrease in advances to suppliers

from Medigus settled against receivable from Medigus

of loan from Medigus

accompanying notes are an integral part of these consolidated financial statements.

(Formerly known as Intellisense Solutions Inc.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

(the “Company”), formerly 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 its 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”.

(the “Subsidiary”, “ScoutCam”), was formed in the State of Israel on January 3, 2019 as a wholly-owned

subsidiary of Medigus Ltd.

(the “Parent Company”, “Medigus”), an Israeli company traded both on the Nasdaq

Capital Market and the Tel Aviv Stock Exchange, and commenced operations on March 1, 2019.

Upon incorporation, the Subsidiary

issued to Medigus 1,000,000 ordinary shares with no par value.

On March 2019, the Subsidiary issued to Medigus an additional

1,000,000 ordinary shares with no par value.

Subsidiary was incorporated as part of a reorganization of Medigus, which was designed to distinguish the Subsidiary’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 miniaturized imaging business.

In December 2019, Medigus and the Subsidiary 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 the Subsidiary.

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 the Subsidiary 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”).

In addition, the Exchange Agreement provides that

if ScoutCam achieves an aggregated amount of USD 33 million in sales within the first three years immediately after the Closing, the

Company will issue to Medigus 2,688,492 additional shares of Company’s common stock.

The Closing occurred on December

30, 2019 (the “Closing Date”).

On December 31, 2019, Intellisense changed its name to ScoutCam Inc.

the transaction resulted in the Subsidiary becoming a wholly owned subsidiary of Intellisense, the transaction constituted a reverse

recapitalization since Medigus, the only shareholder of the Subsidiary prior to the Exchange Agreement, was issued a 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, the Subsidiary is considered the accounting

acquirer of the merged company.

“Group”

- the Company together with ScoutCam.

Subsidiary has developed a range of micro CMOS (complementary metal-oxide semiconductor) and CCD (charge-coupled device) video

cameras, including micro ScoutCam™

These innovative cameras are suitable for both medical and industrial applications.

Based on its proprietary technology, the Subsidiary designs and manufactures endoscopy and micro camera systems for partner companies.

(Formerly known as Intellisense Solutions Inc.)

1 – GENERAL :

ScoutCam Inc.

(the “Company”), formerly

known as Intellisense Solutions Inc., (“Intellisense”), was incorporated under the laws of the State of Nevada on March

Prior to the closing of the Exchange Agreement (as defined below), the Company was a non-operating “shell

The Company’s wholly owned subsidiary,

ScoutCam Ltd.

(“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

In December 2019, Medigus and ScoutCam consummated

an asset transfer agreement, under which Medigus transferred and assigned certain assets and intellectual property rights

related to its miniaturized imaging business to ScoutCam.

On December 30, 2019, Intellisense and

Medigus consummated a securities exchange agreement (the “Exchange Agreement”), pursuant to which

Medigus delivered 100% of its holdings in ScoutCam to Intellisense in exchange for shares of Intellisense’s common stock representing

60% of the issued and outstanding share capital of Intellisense immediately upon the consummation of the Exchange Agreement.

As of December 31, 2021, Medigus beneficially owned

27.01% of the Company’s outstanding common stock.

The Company, through ScoutCam, provides

image-based platforms.

Through the use of its proprietary visualization technology, ScoutCam offers solutions across predictive

maintenance and condition-based monitoring markets, in sectors such as energy, automotive and aviation.

solutions are based on small and highly resilient cameras, specialized AI analysis and supplementary technologies.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 – GENERAL (continued) :

During the year ended December 31, 2020, the Company

incurred a loss of USD 4,667 thousand and negative cash flows from operating activities of approximately USD 4,187 thousand.

the projected cash flows, the Company’s Management is of the opinion that without further fundraising it will not have sufficient

resources to enable it to continue its operating activities including the development, manufacturing and marketing of its products within

one year after the issuance date of these consolidated financial statements.

As a result, there is a substantial doubt about the Company’s

ability to continue as a going concern within one year after the issuance date of these financial statements.

Management did not take into account the proceeds

from the private placement (see note 13c), because the closing of the private placement didn’t occur as of the date of issuance of these

financial statements.

Management’s plans include continuing commercialization

of the Company’s products and securing sufficient financing through the sale of additional equity securities, debt or capital inflows

from strategic partnerships and other opportunities.

There are no assurances however, that the Company will be successful in obtaining

the level of financing needed for its operations.

If the Company is unsuccessful in commercializing its products and securing sufficient

financing, it may need to reduce activities, curtail or even cease operations.

These consolidated financial statements have been

prepared assuming the Company will continue as a going concern, which assumes the realization of assets and the satisfaction of liabilities

and commitments in the normal course of business.

Accordingly, the consolidated financial statements do not include any adjustments relating

to the recoverability and classification of recorded assets and the amounts and classification of liabilities that might be necessary

should the Company be unable to continue as a going concern.

COVID-19 pandemic has had a significant impact on global markets and the global economy, including countries in which the

Company operates.

As the extent of the impact on the global economy remains unclear, the Company anticipates that it will

have a continuing impact on global economies in the near and long-term future.

In light of the below mentioned factors, the

COVID-19 pandemic had and most likely will continue to have a material effect on the Company’s operations, and the extent

to which the COVID-19 pandemic will impact the Company’s operations will depend on future developments.

In particular,

the continued spread of COVID-19 globally had and most likely will continue to have material adverse impact on the Company’s

operations and workforce, including its manufacturing activities, product sales, as well as its ability to continue to raise

Travel restrictions had and most likely will continue to have a material adverse impact on Company’s

sales and marketing and research and development efforts.

(Formerly known as Intellisense Solutions Inc.)

August 9, 2021, the Company amended its Articles of Incorporation to effect a nine-to-one

reverse stock split of its outstanding Common Stock.

a result of the reverse stock split, every nine shares of the Company’s outstanding Common Stock 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

The amount of authorized capital of the Company’s Common Stock and par value of such shares remained unchanged.

share, stock option and per share information in these consolidated financial statements have been adjusted to reflect the reverse

stock split on a retroactive basis.

incorporation of ScoutCam and through December 31, 2021, the Company accumulated

a deficit of approximately $ 15.3 million

and its activities have been funded mainly by its shareholders.

The Company’s management

believes the Company’ cash and cash resources as of December 31, 2021 will enable

the Company to fund its operating plan for more than 12 months from the date of issuance

of these financial statements.

The Company expects to continue to incur significant

research and development expenses and other costs related to its ongoing operations and,

as a result, will need to obtain additional funding in order to continue its future operations.

early 2020, the World Health Organization declared the rapidly spreading coronavirus disease (COVID-19) outbreak a pandemic.

pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus.

considered the impact of COVID-19 on its operations and determined that there were no material adverse impacts on the Company’s

results of operations and financial position as of December 31, 2021.

These estimates may change, as new events occur and additional

information is obtained.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 – SIGNIFICANT ACCOUNTING POLICIES :

of preparation:

The accounting treatment for

the Exchange Agreement was as a reverse recapitalization of ScoutCam, for financial accounting and reporting purposes.

As such, ScoutCam Ltd.

is treated as the acquirer for accounting and financial reporting purposes while the Company is treated

as the acquired entity for accounting and financial reporting purposes.

As a result, the comparative figures that are reflected

in the Company’s financial statements are those of ScoutCam and from the Closing Date, the Company’s assets, liabilities

and results of operations are consolidated with the assets, liabilities and results of operations of ScoutCam.

consolidated financial statements reflect the Company’s financial position, results of operations, changes in shareholders

equity (capital deficiency) and cash flows in accordance with generally accepted accounting principles in the United States

GAAP”).

accompanying comparative financial statements include the historical accounts of ScoutCam as a “Carve-out Business”,

a division of Medigus.

Throughout the comparative periods included in these financial statements, the Carve-out Business

operated as part of Medigus.

Separate financial statements have not historically been prepared for the Carve-out Business.

comparative carve-out financial statements have been prepared on a standalone basis and are derived from Medigus’s consolidated

financial statements and accounting records.

The carve-out comparative financial statements reflect ScoutCam’s financial

position, results of operations, changes in net Parent Company deficit and cash flows in accordance with U.S.

financial position, results of operations, changes in net parent deficit, and cash flows of the Carve-out Business may not be

indicative of its results had it been a separate stand-alone entity during the comparative periods presented.

comparative carve-out financial statements of the Company include expenses which were allocated from Medigus for certain functions,

including general corporate expenses related to corporate strategy, procurement, Information Technology (“IT”), Human

Resources (“HR”) and legal.

These allocation have been made on the basis of direct usage when identifiable, with the

remainder allocated on the basis of headcount.

Management believes the expense allocation methodology and results are reasonable

and consistently applied for all comparative periods presented.

However, these allocations may not be indicative of the actual

expenses that would have been incurred by an independent company or of the costs to be incurred in the future.

carve-out comparative financial statements include assets and liabilities specifically attributable to the Carve-out Business.

Transfers of cash between Carve-out Business and Medigus are included within “Transfers from Parent

Company”

on the Statements of Cash Flows and the Statements of changes in shareholder’s equity (capital deficiency).

the carve-out comparative financial statements have been prepared on a carve-out basis, the amounts reflected in Parent Company deficit

in the comparative statement of changes in shareholder’s equity (capital deficiency) refer to net loss for the period attributed

(Formerly known as Intellisense Solutions Inc.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 - SIGNIFICANT ACCOUNTING POLICIES (continued) :

Basis of preparation :

consolidated financial statements reflect the Company’s financial position, results of operations, changes in shareholders equity

(capital deficiency) and cash flows in accordance with generally accepted accounting principles in the United States (“U.S.

Use of estimates

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, as well as in estimates

used in applying the revenue recognition policy.

Actual results may differ from those estimates.

majority of ScoutCam’s revenues are generated in U.S.

The substantial majority of ScoutCam costs are incurred in

dollars and New Israeli Shekels (“NIS”).

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 its assumptions on an

ongoing basis, including those related to contingencies, deferred taxes and inventory impairment, as well as estimates used in applying

its revenue recognition policy.

Actual results may differ from these estimates.

Functional currency

majority of ScoutCam’s revenues are generated in U.S.

The substantial majority of ScoutCam costs are incurred in U.S.

dollars and New Israeli Shekels (“NIS”).

ScoutCam management believes that the U.S.

dollar is the currency of

the primary economic environment in which ScoutCam operates.

dollar is the currency of the primary

economic environment in which ScoutCam operates.

Thus, the functional currency of ScoutCam is the U.S.

2 unchanged sentences

Balances in non U.S.

dollar currencies are translated into U.S.

dollars using historical and current exchange rates for non-monetary and monetary

balances, respectively.

dollar transactions and other items in the statements of operations (indicated below),

the following exchange rates are used:

(i) for transactions exchange rates at transaction dates and (ii) for other items

(derived from non-monetary balance sheet items such as depreciation and amortization) historical exchange rates.

transaction gains and losses are presented in financial income or expenses, as appropriate.

and Cash Equivalents

dollar currencies are

translated into U.S.

dollars using historical and current exchange rates for non-monetary and monetary balances, respectively.

dollar transactions and other items in the statements of operations (indicated below), the following exchange rates are used:

transactions exchange rates at transaction dates and (ii) for other items (derived from non-monetary balance sheet items such as depreciation

and amortization) historical exchange rates.

Currency transaction gains and losses are presented in financial income or expenses, as

Cash and Cash Equivalents

Company considers as cash equivalents all short-term, highly liquid investments, which include short-term bank deposits with original

1 unchanged sentence

to known amounts of cash.

receivable are presented in the Company’s consolidated balance sheets net of allowance for doubtful accounts.

Company estimates the collectibility of its accounts receivable balances and adjusts its allowance for doubtful accounts accordingly.

revenue recognition criteria are not met for a sale transaction that has been billed, the Company does not recognize deferred

revenues or the related account receivable.

Short-term bank deposits

deposits with maturities of more than three months but less than one year are included in short-term bank deposits.

Such short-term bank

deposits are stated at cost which approximates fair market value.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 - SIGNIFICANT ACCOUNTING POLICIES (continued) :

Accounts receivable

receivable are presented in the Company’s consolidated balance sheets net of allowance for doubtful accounts.

The Company estimates

the collectability of its accounts receivable balances and adjusts its allowance for doubtful accounts accordingly.

revenue recognition criteria are not met for a sale transaction that has been billed, the Company does not recognize deferred revenues

or the related account receivable.

of December 31, 2021 and 2020, no allowance for doubtful accounts was recorded.

and equipment

and equipment is stated at cost, net of accumulated depreciation and amortization.

Property and equipment

and equipment are stated at cost, net of accumulated depreciation and amortization.

Depreciation is calculated on a straight-line basis

1 unchanged sentence

annual depreciation rates are as follows:

OF PROPERTY AND EQUIPMENT ANNUAL DEPRECIATION RATES

and laboratory equipment

2 unchanged sentences

the shorter of the lease term (including options if any) or useful life

(Formerly known as Intellisense Solutions Inc.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 - SIGNIFICANT ACCOUNTING POLICIES (continued) :

Severance pay

labor law generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain other

circumstances.

Pursuant to Section 14 of the Severance Compensation Act, 1963 (“Section 14”), all of the Company’s

employees in Israel are entitled a monthly contribution, at a rate of 8.33% of their monthly salary, made in their name

with insurance companies.

Contributions under Section 14 relieve the Company from any future severance payment obligation with

respect to those employees.

The aforementioned contributions are not recorded as an asset on the Company’s balance sheet, and

there is no liability recorded as the Company does not have a future obligation to make any additional payments.

Pursuant to Section 14 of the Severance Compensation Act, 1963 (“Section 14”), all of the ScoutCam’s

employees in Israel are entitled to a monthly contribution, at a rate of 8.33 %

of their monthly salary, made in their name with insurance companies.

Contributions under Section 14 relieve the ScoutCam from any future

severance payment obligation with respect to those employees.

The aforementioned contributions are not recorded as an asset on the Company’s

balance sheet, and there is no liability recorded as the Company does not have a future obligation to make any additional payments.

asset and the liability for severance pay presented in the balance sheets reflects employees that began employment prior to automatic

application of Section 14.

severance pay liability of the Company to its employees that began employment prior to automatic application of Section 14 based

upon the number of years of service and the latest monthly salary and is partly covered by regular deposits with recognized pension funds

and deposits with severance pay funds.

Under labor laws, these deposits are in the employees’

names and, subject to certain

limitations, are the property of the employees.

The Company records the obligation as if it were payable at each balance sheet date on

an undiscounted basis.

Company measures and recognizes compensation expense for its equity classified stock-based awards, including option awards exercisable

into shares of common stock of the Parent Company under its plan based on estimated fair values on the grant

The Company calculates the fair value of option awards on the grant date using the Black-Scholes option pricing model.

Black-Scholes option-pricing model requires a number of assumptions, of which the most significant are the stock price

volatility and the expected option term.

For the years ended December 31, 2019, and 2018, the volatility was based on the historical

stock volatility of the Parent Company.

The Company’s expected dividend rate is zero since the Company does not currently

pay cash dividends on its stocks and does not anticipate doing so in the foreseeable future.

Each of the above factors requires

the Company to use judgment and make estimates in determining the percentages and time periods used for the calculation.

Company were to use different percentages or time periods, the fair value of option awards could be materially different.

Company recognizes stock-based compensation cost for option awards on a accelerated basis over the employee’s requisite

service period, net of estimated forfeitures.

(Formerly known as Intellisense Solutions Inc.)

severance pay liability of ScoutCam to its employees that began employment prior to automatic application of Section 14 is based upon

the number of years of service and the latest monthly salary of such employees and is partly covered by regular deposits with recognized

pension funds and deposits with severance pay funds.

Under labor laws, these deposits are in the employees’ names and, subject

to certain limitations, are the property of the employees.

ScoutCam records the obligation as if it were payable at each balance sheet

date on an undiscounted basis.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 - SIGNIFICANT ACCOUNTING POLICIES (continued) :

Stock-Based Compensation

Company measures and recognizes compensation expense for its equity classified stock-based awards granted under its plan based on estimated

fair values on the grant dates.

The Company calculates the estimated fair value of option awards on the grant date using the Black-Scholes

option-pricing model.

The Black-Scholes option-pricing model requires a number of assumptions, of which the most significant are the

stock price volatility and the expected option term.

The Company’s expected dividend rate is zero since the Company does not currently

pay cash dividends on its stocks and does not anticipate doing so in the foreseeable future.

Each of the above factors requires the Company

to use judgment and make estimates in determining the percentages and time periods used for the calculation.

If the Company were to use

different percentages or time periods, the estimated fair value of option awards could be materially different.

The Company recognizes

stock-based compensation cost for option awards on a accelerated basis over the employee’s requisite service period, net of estimated

include raw materials, inventory in process and finished products and are valued at the lower of cost or net realizable value.

cost is determined on the basis of “first in-first out”

Cost of purchased raw materials and inventory in process

includes costs of design, raw materials, direct labor, other direct costs and fixed production overheads.

Materials and other

supplies held for use in the production of inventories are not written down if the finished products in which they

will be incorporated are expected to be sold at or above cost.

cost is determined a “first in-first out” basis.

Cost of purchased raw materials and inventory in process includes costs

of design, raw materials, direct labor, other direct costs and fixed production overheads.

Materials and other supplies held for use

in the production of inventories are not written down if the finished products in which they will be incorporated are expected to be

sold at or above cost.

Company regularly evaluates its ability to realize the value of inventory based on a combination of factors including the following:

forecasted sales or usage, estimated current and future market values.

January 1, 2018, the Company’s revenues are measured according to the ASC 606, “Revenue from Contracts with Customers”

(“ASC 606”).

Under ASC 606, revenues are measured according to the amount of consideration that the Company expects to be

entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties,

such as VAT taxes.

forecasted sales or usage and estimated current and future market values.

Revenue recognition

The Company’s revenues are

measured according to the ASC 606, “Revenue from Contracts with Customers” (“ASC 606”).

Under ASC 606, revenues

are measured according to the amount of consideration that the Company expects to be entitled in exchange for transferring promised goods

or services to a customer, excluding amounts collected on behalf of third parties, such as VAT taxes.

Revenues are presented net of VAT.

Company recognizes revenue when a customer obtains control over promised goods or services.

For each performance obligation,

the Company determines at contract inception whether it satisfies the performance obligation over time or satisfies the performance

obligation at a point in time.

For each performance obligation, the Company

determines at contract inception whether it satisfies the performance obligation over time or satisfies the performance obligation at

a point in time.

obligations are satisfied over time if one of the following criteria is met:

the customer simultaneously receives and consumes the benefits provided by the Company’s performance;

(b) the Company’s

performance creates or enhances an asset that the customer controls as the asset is created or enhanced;

or (c) the Company’s

performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment

for performance completed to date.

a performance obligation is not satisfied over time, a Company satisfies the performance obligation at a point in time.

(Formerly known as Intellisense Solutions Inc.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 - SIGNIFICANT ACCOUNTING POLICIES (continued) :

transaction price is allocated to each distinct performance obligations on a relative standalone selling price (“SSP”)

basis and revenue is recognized for each performance obligation when control has passed.

In most cases, the Company is able to

establish SSP based on the observable prices of services sold separately in comparable circumstances to similar customers and

for products based on the Company’s best estimates of the price at which the Company would have sold the product regularly

on a stand-alone basis.

The Company reassesses the SSP on a periodic basis or when facts and circumstances change.

from product sales are recognized at a point in time when the customer obtains control of the Company’s product,

typically upon shipment to the customer.

Sales taxes collected from customers relating to product sales and remitted to

governmental authorities are excluded from revenues.

the customer simultaneously receives and consumes the benefits provided by the Company’s performance;

(b) the Company’s performance

creates or enhances an asset that the customer

as the asset is created or enhanced;

or (c) the Company’s performance does not create an asset with an alternative use to the Company

and the Company has an enforceable right to payment for performance completed to date.

a performance obligation is not satisfied over time, a Company satisfies the performance obligation at a point in time.

transaction price is allocated to each distinct performance obligations on a relative standalone selling price (“SSP”) basis

and revenue is recognized for each performance obligation when control has passed.

In most cases, the Company is able to establish SSP

based on the observable prices of services sold separately in comparable circumstances to similar customers and for products based on

the Company’s best estimates of the price at which the Company would have sold the product regularly on a stand-alone basis.

Company reassesses the SSP on a periodic basis or when facts and circumstances change.

from product sales are recognized at a point in time when the customer obtains control of the Company’s product, typically upon

shipment to the customer.

Indirect taxes collected from customers relating to product sales and remitted to governmental authorities

are excluded from revenues.

Company also generates revenues from development services.

Revenue from development services is recognized over the period of

the applicable service contract.

To the extent development services are not distinct from the performance obligation relating

to the subsequent mass production phase of the prototype under development, revenue from these services is deferred until commencement

of the production phase of the project.

are no long-term payment terms or significant financing components of the Company’s contracts.

Company’s contract payment terms for product and services vary by customer.

The Company assesses collectibility based on

several factors, including collection history.

Revenue from development services is recognized over the period of the applicable

service contract.

To the extent development services are not distinct from the performance obligation relating to the subsequent mass

production phase of the prototype under development, revenue from these services is deferred until commencement of the production phase

of the project.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 - SIGNIFICANT ACCOUNTING POLICIES (continued) :

Cost of revenues

Cost of revenue consists of products

purchased from sub-contractors, raw materials for in-house assembly line, shipping and handling costs to customers, salary, employee-related

expenses, depreciation and overhead expenses.

Cost of revenues are expensed commensurate

with the recognition of the respective revenues.

Costs deferred in respect of deferral of revenues are recorded as contract fulfilment

assets on the Company’s balance sheet, and are written down to the extent the contract is expect to incur losses.

and development costs

and development costs are expensed as incurred and includes salaries and employee-related expenses, overhead expenses, material

and third-party contractor’s charges.

taxes are accounted for using the asset and liability approach under ASC-740, “Income Taxes”

(“ASC-740”).

The asset and liability approach require the recognition of taxes payable or refundable for the current year and deferred tax

liabilities and assets for the future tax consequences of events that have been recognized in the Company’s financial statements

or tax returns.

of revenue consists of products purchased from sub-contractors, raw materials for in-house assembly line, shipping and handling costs

to customers, salary, employee-related expenses, depreciation and overhead expenses.

of revenues are expensed commensurate with the recognition of the respective revenues.

Costs deferred in respect of deferral of revenues

are recorded as contract fulfilment assets on the Company’s balance sheet and are written down to the extent the contract is expected

to incur losses.

Research and development costs

and development costs are expensed as incurred and includes salaries and employee-related expenses, overhead expenses, material and third-party

contractors’ charges.

taxes are accounted for using the asset and liability approach under ASC-740, “Income Taxes”.

The asset and liability approach

require the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax

consequences of events that have been recognized in the Company’s financial statements or tax returns.

measurement of current and deferred tax liabilities and assets is based on provisions of the relevant tax law.

The measurement

of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not

expected to be realized.

Uncertain tax positions are accounted

for in accordance with the provisions of ASC 740-10, under which a company may recognize the tax benefit from an uncertain tax position

claimed or expected to be claimed on a tax return only if it is more likely than not that the tax position will be sustained on examination

by the taxation authorities, based on the technical merits of the position, at the largest benefit that has a greater than fifty percent

likelihood of being realized upon ultimate settlement.

Interest and penalties, if any, related to unrecognized tax benefits, are

recognized in tax expense.

(Formerly known as Intellisense Solutions Inc.)

The measurement of deferred

tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized.

tax positions are accounted for in accordance with the provisions of ASC 740-10, under which a company may recognize the tax benefit

from an uncertain tax position claimed or expected to be claimed on a tax return only if it is more likely than not that the tax position

will be sustained on examination by the taxation authorities, based on the technical merits of the position, at the largest benefit that

has a greater than fifty percent likelihood of being realized upon ultimate settlement.

Interest and penalties, if any, related to unrecognized

tax benefits, are recognized in tax expense.

Legal contingencies

time to time, the Company and its subsidiary become involved in legal proceedings or are subject to claims arising in their ordinary

course of business.

Such matters are generally subject to many uncertainties and outcomes are not predictable with assurance.

accrues for contingencies when the loss is probable and can reasonably estimate the amount of any such loss.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 — SIGNIFICANT ACCOUNTING POLICIES (continued):

contingencies

time to time, the Company becomes involved in legal proceedings or is subject to claims arising in its ordinary course of business.

Such matters are generally subject to many uncertainties and outcomes are not predictable with assurance.

The Company accrues

for contingencies when the loss is probable, and it can reasonably estimate the amount of any such loss.

loss per share is computed by dividing net loss, by the weighted average number of ordinary shares as described below.

computing the Company’s diluted earnings per share, the numerator used in the basic earnings per share computation is adjusted

for the dilutive effect, if any, of the Company’s potential common stock.

The denominator for diluted earnings per share

is a computation of the weighted-average number of ordinary shares and the potential dilutive shares common stock outstanding

during the period.

loss per share information in these consolidated financial statements is reflected and calculated as if the Company had existed

since January 1, 2018.

Accordingly, loss per share for all periods was calculated based on the number of ordinary shares

retroactively adjusted for the exchange ratio determined in the reverse recapitalization (see also note 3).

Company determines if an arrangement contains a lease at inception.

Company’s leases do not contain any residual

value guarantees or material restrictive covenants.

rate implicit is most of Company’s leases are

not reasonably determinable, therefore we use our incremental borrowing rate based on the information available at the commencement date

to determine the present value of the future lease payments.

of Company’s leases include variable costs.

Variable costs include non-lease components that were incurred based

upon actual terms rather than contractually fixed amounts.

In addition, variable costs are incurred for lease payments that are

indexed to a change in rate or index.

Because the ROU asset recorded on the balance sheet was determined based upon factors considered

at the commencement date, subsequent changes in the rate or index that were not contemplated in the ROU asset balances recorded

on the balance sheets result in variable expenses being incurred when paid during the lease term.

Basic and diluted net loss per common stock :

net loss per common stock is computed by dividing net loss, as adjusted to include the weighted average number of shares of common stock

outstanding during the year.

net loss per common stock is computed by dividing net loss, as adjusted, by the weighted average number of shares of common stock outstanding

during the year, plus the number of shares of common stock that would have been outstanding if all potentially dilutive shares of common

stock had been issued, using the treasury stock method, in accordance with ASC 260-10 “Earnings per Share”.

outstanding stock options and warrants have been excluded from the calculation of the diluted loss per share for the years ended December

31, 2021 and December 31, 2020, since all such securities have an anti-dilutive effect.

In accordance with ASC 842,

leases, at inception of an arrangement, the Company determines whether an arrangement is or contains a lease based on the

facts and circumstances present in the arrangement.

An arrangement is or contains a lease if the arrangement conveys the right to control

the use of an identified asset for a period of time in exchange for consideration.

Arrangements that are determined to

be leases at inception are recognized in long-term right-of-use assets (“ROU”) assets and short and long-term lease liabilities

in the consolidated balance sheet at lease commencement.

Operating lease ROU assets and operating lease liabilities are recognized based

on the present value of the future fixed lease payments over the lease term at commencement date.

As most of the Company’s

leases do not provide an implicit rate, the Company applies its incremental borrowing rate based on the economic environment at commencement

date in determining the present value of future payments.

Lease terms may include options to extend or terminate the lease when it is

reasonably certain that the Company will exercise that option.

Lease expense for operating leases or payments are recognized on

a straight-line basis over the lease term.

Company has elected not to recognize on the balance sheet leases with terms of 12 months or less.

(Formerly known as Intellisense Solutions Inc.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

3 - REVERSE RECAPITALIZATION

December 30, 2019, Intellisense and Medigus completed the Exchange Agreement.

The accounting treatment for the Exchange Agreement

was as a reverse recapitalization transaction.

Pursuant to the Exchange Agreement, Intellisense issued to Medigus 16,130,952

Upon such issuance, ScoutCam became a wholly-owned subsidiary of Intellisense.

On December 31,

2019, Intellisense Solutions Inc.

changed its name to ScoutCam Inc.

prior to the Closing Date the Company’s outstanding common stock was comprised of 3,927,346 shares of common stock $0.001 par value, of which 1,352,666 shares were issued immediately prior to the Closing Date as part of the conversion

of promissory notes to related parties and the exercise of warrants by related parties, employees and service providers.

on the Closing Date, 3,413,312 units, each comprised of two shares

of common stock par value USD 0.001 per share, one Warrant A (as defined below) and two Warrants B (as defined below), were issued

to investors as part of the financing transaction that the Company was obligated to secure prior to the Closing.

The immediate

gross proceeds from the issuance of the units amounted to approximately USD 3.3 million.

Warrant A was exercisable into one share of common stock of the Company at an exercise price of USD 0.595 per share during

the12 month period from the date of issuance.

Each Warrant B is exercisable into one share of common stock of the Company

at an exercise price of USD 0.893 per share during the 18 month period from the date of issuance.

2020, 2,992,855 Warrants A were exercised.

420,457 unexercised Warrants A expired on December 30,2020.

ScoutCam Inc.

was the legal acquirer, ScoutCam was treated as the acquiring company for accounting purposes as the Exchange Agreement

was accounted for as a reverse recapitalization which is equivalent to the issuance of 10,753,969 shares by ScoutCam for the net

monetary assets of ScoutCam Inc.

As a result, the financial statements of the Company prior to the Closing Date are the historical financial

statements of ScoutCam Ltd.

The financial statements of the Company after the Closing Date reflect the results of the operations of ScoutCam

and ScoutCam Inc.

on a combined basis.

The net acquired assets of the Company as of the Closing Date was $3,040 thousands.

were no fair value adjustments necessary to perform as the carrying values of the net acquired assets approximated fair value.

given the nature of the operations of ScoutCam Inc.

prior to the Closing Date, there were no intangible assets, including goodwill, established

as a result of the Exchange Agreement.

Under the Exchange Agreement, the number

of shares of common stock and USD amount for common stock is based on the nominal value and the shares of common stock

issued by ScoutCam Inc.

(reflecting the legal structure of ScoutCam Inc.

as the legal acquirer) on the Closing Date plus shares of

common stock issued by ScoutCam Inc.

as part of the Exchange Agreement as described above.

Historical stockholders’

reflects the accounting acquirer, except for share number and USD amount adjusted for the shares exchange ratio pursuant to the Exchange

Agreement amounting to 8.065.

(Formerly known as Intellisense Solutions Inc.)

Recent Accounting Standards:

for Income Taxes

December 2019, the Financial Accounting Standards Board issued Accounting Standards Update No.

ASU 2019-12, “Simplifying the Accounting

for Income Taxes”.

This ASU amends Accounting Standards Codification (“ASC”) 740 by removing certain exceptions to

the general principles, clarifying and amending existing guidance.

This guidance is effective for fiscal years, and interim periods within

those years, beginning after December 15, 2020.

The Company adopted this standard in the first quarter of 2021.

The adoption of this

ASU did not impact on the Company’s financial statements or the related disclosures.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

3 – SHORT-TERM DEPOSITS

term investments as of December 31, 2021 include bank deposits bearing annual interest rates varying from 0.3 %

with maturities of up to 12 months .

4 - INVENTORY :

Raw materials and supplies

Work in progress

Finished goods

Inventory write downs

SCHEDULE OF INVENTORY

materials and supplies

the year ended 2021, no impairment occurred.

the year ended 2020, the Company recognized an inventory impairment of $ 79

5 - PROPERTY AND EQUIPMENT, NET :

plant and equipment, net consisted of the following:

Machinery and laboratory equipment

Leasehold improvements, office furniture and equipment

Computers and computer software

Total property

and equipment, net

expenses were USD 66 thousand, USD 6 thousand and USD 5 thousand in the years ended December 31, 2020,

2019 and 2018, respectively.

OTHER ACCRUED EXPENSES:

Unpaid recapitalization

transaction costs

IRS (see note 7b)

Accrued expenses

(Formerly known as Intellisense Solutions Inc.)

SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT NET

and laboratory equipment

improvements, office furniture and equipment

and computer software

property and equipment, gross

accumulated deprecation

property and equipment, net

expenses were $ 114 thousand

and $ 66 thousand

for the years ended December 31, 2021 and 2020, respectively.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

6 – OTHER ACCRUED EXPENSES :

SCHEDULE OF OTHER ACCRUED EXPENSES

(see note 7b)

other accrued expenses

7 - INCOME TAXES :

Company and its subsidiary are taxed under the domestic tax laws of the jurisdiction of incorporation of each entity (United States

Company and its subsidiary are taxed under the domestic tax laws of the jurisdiction of incorporation of each entity (United States and

Israel, respectively).

from Israel was taxed at the corporate tax rate of 23 %.

was incorporated in the United States and is subject to the Federal and State tax laws established in the United States.

December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law.

The Act reduces the corporate tax rate

to 21 percent from 35 percent, among other things.

did not timely file its tax return for 2013-2014 and therefore the IRS imposed penalties in the amount of $60

thousand (approximately $73 thousands including interest).

Company was incorporated in the United States and is subject to the federal and state tax laws established in the United States.

December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law.

The Act reduces the corporate tax rate to 21

percent from 35 percent, among other things .

Company did not timely file its tax return for 2013-2014 and therefore the IRS imposed penalties in the amount of $ 60 thousand (approximately

$ 73 thousands including interest).

As a result of a penalty abatement request by the Company, the IRS abated the penalty to approximately

to $ 40 thousand.

tax loss carry forwards

of December 31, 2020, the Company has accumulated losses for tax purposes that were generated in Israel.

These losses may

be carried forward and offset against taxable income in the future for an indefinite period.

A full valuation allowance was created

against the Company’s deferred tax assets generated in Israel.

Management currently believes that it is more likely than

not that the deferred taxes generated in Israel will not be realized in the foreseeable future.

(Formerly known as Intellisense Solutions Inc.)

of December 31, 2021, ScoutCam has accumulated losses for tax purposes that were generated in Israel.

These losses may be carried forward

and offset against taxable income in the future for an indefinite period.

A full valuation allowance was created against the ScoutCam’s

deferred tax assets generated in Israel.

Management currently believes that it is more likely than not that the deferred taxes generated

in Israel will not be realized in the foreseeable future.

December 31, 2021, following a VAT audit in Israel for years 2019-2021, ScoutCam owed

approximately NIS 740

(which is approximately $ 229

additional taxes to the Israeli Tax Authorities.

As such, the financial statements as of December 31, 2021, include a provision of $ 229

included in general and administrative expenses.

On November 18, 2021, ScoutCam submitted

an appeal to the Israeli Tax Authority on the finding of this VAT audit.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

8 – RELATED PARTIES :

May 30, 2019, ScoutCam entered into an intercompany agreement with Medigus (the “Intercompany

Agreement”) according to which ScoutCam 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 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

employee car;

(4) external accountant services at a price of USD 6,000 per annum;

directors and officers insurance at a sum of 1/3 of Parent Company cost;

services at a sum of 50% of Parent Company CFO employer cost;

(7) every direct

expense of ScoutCam that is paid by the Parent Company 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.

total expenses for year ended December 31, 2019 amounted to USD 329 thousand.

As of December 31, 2019, the balance with

Medigus amounted to USD 73 thousand.

April 20, 2020, the Subsidiary entered into an amended and restated intercompany services agreement with Medigus.

The agreed upon

services provided under the amended and restated Intercompany Agreement included:

lease of office space based on actual space utilized by the Parent Company and in shared spaces according to employee ratio;

utilities such as electricity water, IT and communication services based on employee ratio;

On April 20, 2020, ScoutCam entered into an Amended

and Restated Intercompany Services Agreement with Medigus (the “Intercompany agreement”).

The agreed upon services provided

under the amended and restated Intercompany Agreement include:

lease of office space based on actual space utilized by Medigus and in shared spaces according to employee ratio;

(2) utilities such

as electricity, water, information technology 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 Subsidiary employee car;

gas usage and payment for toll roads based on 100% of expense incurred from ScoutCam’s employee car;

(5) directors and officers

insurance the Parent Company shall pay $150,000 of the annual premium.;

(6) CFO services at a sum of 50% of Parent Company CFO

employer cost;

(7) every direct expense of the Subsidiary that is paid by the Parent Company in its entirety subject to approval

of such direct expenses in advance;

and (7) any other mutual expense that is borne by the parties according to the respective

portion of the mutual expense.

total net expenses for year ended December 31, 2020 amounted to USD 143 thousand.

As of December 31, 2020, the balance with Medigus

amounted to USD 47 thousand.

addition, ScoutCam’s employees provide support services to Medigus.

For additional information see note 11b.

June 3, 2019, the Parent Company executed a capital contribution with ScoutCam

whereby it paid an aggregate amount of USD 720 thousand.

insurance, Medigus shall pay $150,000 of the annual premium for;

(6) CFO services at a sum of 50% of Medigus’ CFO employer cost;

(7) every direct expense of ScoutCam’s that is paid by Medigus in its entirety subject to approval of such direct expenses in advance;

and (7) any other mutual expense that is borne by the parties according to the respective portion of the mutual expense.

total net expenses for year ended December 31, 2020 amounted to $ 143 thousand.

didn’t recognize expenses for the year ended December 31, 2021 in connection with this agreement.

On March 22, 2022, ScoutCam

provided 60 days prior written notice to Medigus of termination of the Intercompany Services Agreement.

July 31, 2019, ScoutCam and Prof.

Benad Goldwasser entered into a consulting agreement,

whereby Prof.

Goldwasser agreed to serve as chairman of the Board of Directors

The consulting agreement effective retroactively to March 1, 2019,

in consideration for, inter alia , a monthly fee of $10,000 and options representing

5% of Company’s fully-diluted share capital as of the Closing Date.

August 27, 2019, the Parent Company provided ScoutCam with a line of credit in the aggregate

amount of USD 500 thousand and, in exchange, ScoutCam agreed to grant the Parent Company

a capital note that will bear an annual interest rate of 4%.

The repayment of the credit

line amount shall be spread over one year in monthly payments beginning January 2020.

The said note is presented in the consolidated balance sheets within “Loan

from Parent Company”.

On June 23, 2020, the Company and Medigus entered into a certain

Conversion Side Letter, pursuant to which the Company converted US$381,136 worth of outstanding credit previously extended by Medigus

to the Company, which amount, as of the date thereof, included interest accrued thereon.

In accordance with the terms of the Conversion

Side Letter, the Company issued to Medigus, at a purchase price of US$0.968, (a) 787,471 shares of common stock, (b) warrants

to purchase 393,736 shares of common stock at an exercise price of US$0.595, and (c) warrants to purchase 787,471 shares of

common stock at an exercise price of US$0.893.

September 3, 2019, a certain Asset Transfer Agreement, by and between ScoutCam and the Parent Company dated May 28, 2019,

became effective.

According to the Asset Transfer Agreement, the Company transferred certain assets (property and equipment)

with a nil carrying amount to the Parent Company in consideration of USD 168 thousand.

The assets were then sold to a third

The excess of the said consideration over the carrying amount was directly recorded to shareholders’

December 2019, the Company entered into a consulting agreement with Shrem Zilberman Group (the “Consultant”) in

the amount of USD 165 thousand (see also note 9b).

A director of the Company is related to one of the Consultant’s shareholders.

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

of common stock of the Company to Professor Benad Goldwasser, the Company’s Chairman of the Board, and options

to purchase 1,865,346 shares of common stock of the Company to certain officers of the Company.

Each option is exercisable

into one share of common stock of the Company of $0.001 par value at an exercise price of $0.29.

What changed 10-K

Item 9A. Controls and Procedures