What changed in this filing

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Item 1A. Risk Factors

2024-03-26 compared with 2023-03-28 · 419 added, 262 removed, 531 unchanged (56% of the section changed)

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may require substantial additional funding, which may not be available to us on acceptable terms, or at all.

failure to effectively manage growth could impair our business.

have a single customer that accounts for a substantial portion of our revenues, and our business would be harmed

were we to lose this customer.

we fail to effectively manage growth, our business could be impaired.

commercial success depends upon the degree of market acceptance by prospective markets and industries.

global economic conditions may harm our industry, business and results of operations.

continuing effects of the COVID-19 pandemic are highly unpredictable and could be significant, and the duration and extent to which

this will impact our future results of operations and overall financial performance remains uncertain.

Related to Third Parties

reliance on third-party suppliers for most of the components of our products, including miniature video sensors could harm our ability

to meet demand for our products in a timely and cost-effective manner.

may not be able to manage our strategic partners.

reliance on third-party suppliers for most of the components of our products could harm our ability to meet demand for our products

in a timely and cost-effective manner.

may not be able to manage our strategic partners effectively.

may not have sufficient manufacturing capabilities to satisfy any growing demand for our products.

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Related to Competition

expect to face some competition possibly from our customer.

If we cannot successfully compete there might be adverse effect on the

to comply with anti-bribery, anti-corruption and anti-money laundering laws could subject us to penalties and other adverse consequences.

expect to face competition in the future.

If we cannot successfully compete with new or existing technologies or future developed

products, our marketing and sales will suffer, and we may never be profitable.

we fail to comply with anti-bribery, anti-corruption and anti-money laundering laws, we could be subject to penalties and other adverse

consequences.

Related to Intellectual Property

may not be able to obtain all possible patents or other intellectual property rights necessary

to protect our proprietary technology and business.

may not be able to obtain all possible patents or other intellectual property rights necessary to protect our proprietary technology

and business.

may not be successful in enforcing our intellectual property rights against third parties.

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Risk Factors Related to Our Business

business and operations would suffer in the event of computer system failures, cyber-attacks, or deficiencies in our cyber-security.

business and operations may suffer in the event of computer system failures, cyber-attacks, or deficiencies in our cyber-security.

may be subject to product liability claims, product actions, including product recalls, and other field or regulatory actions that

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operate our business effectively.

Related to this Offering and Our Common Stock

we have filed an application to list our securities on Nasdaq, there can be no assurance that our securities will be so listed or,

if listed, that we will be able to comply with the continued listing standards.

data and information systems and network infrastructure may be subject to hacking or other cybersecurity threats.

incorporate artificial intelligence, or AI, into some of our products.

This technology is new and developing and may present both

compliance and reputational risks.

Related to Our Common Stock

the ownership of our Common Stock continues to be highly concentrated, it may prevent you and other minority stockholders from influencing

significant corporate decisions and may result in conflicts of interest.

resales of Common Stock may cause the market price of our Common Stock to drop significantly, even if our business is doing well.

on the OTC Markets is volatile, sporadic and often thin, which could depress the market price of our Common Stock and make it difficult

for our stockholders to resell their Common Stock.

law and provisions in our amended and restated articles of incorporation and amended and restated bylaws could make a merger, tender

offer or proxy contest difficult, thereby depressing the market price of our common stock.

Anti-takeover

provisions contained in our articles and bylaws, as well as provisions of Nevada law, could impair a takeover attempt.

market price of our Common Stock may be highly volatile and such volatility could cause you to lose some or all of your investment.

our common stock may be deemed a “penny stock,” it may be more difficult for investors to sell shares of our common stock,

and the market price of our common stock may be adversely affected.

Common Stock is currently a “penny stock,” which imposes additional sales practice requirements on broker-dealers that

sell such securities.

with the reporting requirements of federal securities laws can be expensive.

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are subject to the risks of political, economic, health, and military instability in countries outside the United States in which

economic and military instability in Israel may impede our ability to operate and harm our financial results.

in Israel, including the October 7, 2023 attack by Hamas and other terrorist organizations and Israel’s war against them, if

escalated, could negatively affect our operations.

instances of political, economic, or military instability in Israel, if escalated, could impede our ability to operate and harm our

financial results.

may be difficult for investors in the United States to enforce any judgments obtained against us or some of our directors or officers.

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absence of a lengthy operating history;

potential for ongoing operating losses;

for ongoing operating losses;

in multiple currencies;

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cash and short-term deposit balance as of December 31, 2023 was $17 million.

We may require additional funding to fund and grow our

operations and to develop certain products.

There can be no assurance that financing will be available in amounts or on terms acceptable

to us, if at all.

In the event we required additional capital, the inability to obtain such capital will restrict our ability to grow

and may reduce our ability to continue to conduct business operations.

If we require and are unable to obtain additional financing, we

will likely be required to curtail our development plans.

In that event, current stockholders would likely experience a loss of most

or all of their investment.

Additional funding that we do obtain may be dilutive to the interests of existing stockholders.

failure to effectively manage growth could impair our business.

We may require additional funding to fund and grow our operations

and to develop certain products.

There can be no assurance that financing will be available in amounts or on terms acceptable to us,

In the event we require additional capital, the inability to obtain such capital will restrict our ability to grow and may

reduce our ability to continue to conduct business operations.

If we require and are unable to obtain additional financing, we will likely

be required to curtail our development plans.

In that event, current stockholders would likely experience a loss of most or all of their

Additional funding may be dilutive to the interests of existing stockholders.

have a single customer that accounts for a substantial portion of our revenues , and our business

would be harmed were we to lose this customer.

currently have one major customer, a leading Fortune 500 multinational healthcare corporation, which accounted for approximately 98%

and 81% of our revenues for 2023 and 2022, respectively, and is expected to generate most of our forecasted revenue in the near term.

Were we to lose this customer, our revenues would decline significantly, and our business would be harmed.

we fail to effectively manage growth, our business could be impaired.

business strategy contemplates a period of rapid growth which may put a strain on our administrative and operational resources, and our

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well as by the medical community.

current business model is that of a B2B approach in which we seek to identify target businesses interested in integrating our technology or commissioning individual projects using our technology.

current business model is that of a B2B approach in which we seek to identify target businesses interested in integrating our technology

or commissioning individual projects using our technology.

Any product that we commission or that is brought to the market may or may

not gain market acceptance by prospective customers.

The commercial success of our technologies, commissioned products, and any future

product that we may develop depends in part on the medical community as well as other industries for various use cases, depending on

the acceptance by such industries of our commissioned products as a useful and cost-effective solution compared to current technologies.

During 2022, we commenced proactive market penetration into industries other than the biomedical sector, such as the defense and aviation

If our technology or any future product that we may develop does not achieve an adequate level of acceptance, or does not

garner significant commercial appeal, we may not generate significant revenue and may not become profitable.

The degree of market acceptance

will depend on a number of factors, including:

cost, safety, efficacy/performance, perceived value and convenience of our technology and any commissioned product and any future

product that we may develop in relation to alternative products;

The commercial success of our technologies, current products, and any future product

that we may develop depends in part on the medical community as well as other industries for various use cases, depending on the acceptance

by such industries of our products as a useful and cost-effective solution compared to current technologies.

During 2022, we commenced

proactive market penetration into industries other than the biomedical sector, such as the defense and aviation industries.

If our technology

or any future product that we may develop does not achieve an adequate level of acceptance, or does not garner significant commercial

appeal, we may not generate significant revenue and may not become profitable.

The degree of market acceptance will depend on a number

of factors, including:

cost, safety, efficacy/performance, perceived value and convenience of our technology and any current or future product that we may

ability of third parties to enter into relationships with us;

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strength of marketing and distribution support for, and timing of market introduction of, competing technology and products;

concerning our technology or commissioned products or competing technology and products.

concerning our technology or products or competing technology and products.

efforts to penetrate industries and educate the marketplace on the benefits of our technology, and reasons to seek the commissioning

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also have an adverse impact on our future growth.

continuing effects of the COVID-19 pandemic are highly unpredictable and could be significant, and the duration and extent to which this

will impact our future results of operations and overall financial performance remains uncertain.

The extent to which the COVID-19 pandemic ultimately impacts our business

will depend on future developments, which are highly uncertain and cannot be predicted, such as the duration of future outbreaks, including

current and subsequent variants of COVID-19, travel restrictions and social distancing in Israel, the United States and other countries,

business closures or business disruptions, and the effectiveness of actions taken in Israel, the United States and other countries to

contain and treat the disease and to address its impact, including on financial markets or otherwise.

These measures have impacted, and

may further impact, our suppliers and other business partners from conducting business activities as usual (including, without limitation,

the availability and pricing of materials, manufacturing and delivery efforts, clinical trials and other aspects that may affect our business)

for an unknown period of time.

In addition, we, our suppliers and other business partners may experience significant impairments of business

activities due to operational shutdowns or suspensions that may be requested or mandated by national or local governmental authorities

or self-imposed by us, our suppliers or other business partners.

Related to Third Parties

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rely on our third-party suppliers to obtain an adequate supply of quality components on a timely basis with favorable terms to manufacture

our commissioned products.

our products.

Some of those components that we sell are provided to us by a limited number of suppliers.

We will be subject

to disruptions in our operations if our sole or limited supply contract manufacturers decrease or stop production of components or do

not produce components and products of sufficient quantity or quality.

We will be subject to disruptions

in our operations if our sole or limited supply contract manufacturers decrease or stop production of components or do not produce components

and products of sufficient quantity or quality.

Alternative sources for our components will not always be available.

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were to occur, it could have an adverse effect on our business, financial condition, and results of operations.

addition, if we cannot supply commissioned products or future potentially developed products due to a lack of components or are unable

to utilize other components in a timely manner, our business will be significantly harmed.

If inventory shortages occur, they could be

expected to have a material and adverse effect on our future revenues and ability to effectively project future sales and operating results.

addition, if we cannot supply current products or future potentially developed products due to a lack of components or are unable to

utilize other components in a timely manner, our business will be significantly harmed.

If inventory shortages occur, they could be expected

to have a material and adverse effect on our future revenues and ability to effectively project future sales and operating results.

may not be able to manage our strategic partners effectively.

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any or all partnerships or may not realize them in the time frame expected.

may not have sufficient manufacturing capabilities to satisfy any growing demand for our commissioned products.

We may be unable to control

the availability or cost of producing such products.

may not have sufficient manufacturing capabilities to satisfy any growing demand for our products.

We may be unable to control the availability

or cost of producing such products.

current manufacturing capabilities may not reach the required production levels necessary in order to meet growing demands for any products

we may commission or future products we may develop.

There can be no assurance that our commissioned products can be manufactured at

our desired commercial quantities, in compliance with our requirements, and at an acceptable cost.

Any such failure could delay or prevent

us from shipping said products and marketing our technologies in accordance with our target growth strategies.

There can be no assurance that our products can be manufactured at our desired commercial

quantities, in compliance with our requirements, and at an acceptable cost.

Any such failure could delay or prevent us from shipping

said products and marketing our technologies in accordance with our target growth strategies.

Related to Competition

expect to face competition.

If we cannot successfully compete with new or existing technologies or future developed products, our marketing

and sales will suffer and we may never be profitable.

expect to face competition in the future.

If we cannot successfully compete with new or existing technologies or future developed products,

our marketing and sales will suffer, and we may never be profitable.

expect to compete against existing technologies and proven products in different industries.

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to the commercialization of relevant competitive technologies and future products.

to comply with anti-bribery, anti-corruption and anti-money laundering laws could subject us to penalties and other adverse consequences.

we fail to comply with anti-bribery, anti-corruption and anti-money laundering laws, we could be subject to penalties and other adverse

consequences.

are subject to the U.S.

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While we have policies and

procedures to address compliance with such laws, we cannot assure you that our employees and agents will not take actions in violation

of our policies or applicable law, for which we may be ultimately held responsible and our exposure for violating these laws increases

as our international presence is established and as we increase sales and operations in foreign jurisdictions.

Any violation of the FCPA,

the Israeli Anti-Corruption Laws, the UK Bribery Act, or other applicable anti-bribery, anti-corruption laws and anti-money laundering

laws could result in whistleblower complaints, adverse media coverage, investigations, imposition of significant legal fees, loss of

export privileges, severe criminal or civil sanctions or suspension or debarment from U.S.

government contracts, substantial diversion

of management’s attention, a decline in the market price of our common stock or overall adverse consequences to our reputation

procedures to address compliance with such laws, we cannot provide complete assurance that our employees and agents will not take actions

in violation of our policies or applicable law, for which we may be ultimately held responsible.

Our potential exposure for violating

these laws increases as our international presence expands and we increase sales and operations in foreign jurisdictions.

Any violation

of the FCPA, the Israeli Anti-Corruption Laws, the UK Bribery Act, or other applicable anti-bribery, anti-corruption laws and anti-money

laundering laws could result in whistleblower complaints, adverse media coverage, investigations, imposition of significant legal fees,

loss of export privileges, severe criminal or civil sanctions or suspension or debarment from U.S.

government contracts, substantial

diversion of management’s attention, a decline in the market price of our Common Stock or overall adverse consequences to our reputation

and business, all of which may have an adverse effect on our results of operations and financial condition.

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it is possible that:

misappropriation

of our proprietary and confidential information, including technology, will nevertheless occur;

confidentiality agreements will not be honored or may be rendered unenforceable;

parties will independently develop equivalent, superior, or competitive technology or products;

will arise with our current or future strategic licensees, customers, or others concerning the ownership, validity, enforceability,

use, patentability, or registrability of intellectual property;

disclosure of our know-how, trade secrets, or other proprietary or confidential information will occur.

misappropriation of our

proprietary and confidential information, including technology, will nevertheless occur;

our confidentiality agreements

will not be honored or may be rendered unenforceable;

third parties will independently

develop equivalent, superior, or competitive technology or products;

disputes will arise with

our current or future strategic licensees, customers, or others concerning the ownership, validity, enforceability, use, patentability,

or registrability of intellectual property;

unauthorized disclosure

of our know-how, trade secrets, or other proprietary or confidential information will occur.

may not be successful in enforcing our intellectual property rights against third parties.

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process of negotiating a license with a third party can be lengthy and may take months or even years in some circumstances.

we are successful in securing a license agreement, there can be no assurance that our technologies will be used in a product that is

ultimately brought to market, achieves commercial acceptance or results in significant royalties to us.

We generally incur expense prior

to entering into our license agreements, generating a license fee, and establishing a royalty stream from each customer.

costs in any particular period before any associated revenue stream begins, if at all.

Further, it is possible that third parties who

we believe are infringing our intellectual property rights are unwilling to license our intellectual property from us on terms we can

accept, or at all.

are successful in securing a license agreement, there can be no assurance that our technologies will be used in a product that is ultimately

brought to market, achieves commercial acceptance or results in significant royalties to us.

We generally incur expense prior to entering

into our license agreements, generating a license fee, and establishing a royalty stream from each customer.

We may incur costs in any

particular period before any associated revenue stream begins, if at all.

Further, it is possible that third parties who we believe are

infringing our intellectual property rights are unwilling to license our intellectual property from us on terms we can accept, or at

we cannot persuade a third party who we believe is infringing our technology to enter into a license with us, we may be required to consider

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Risk Factors Related to Our Business

business and operations would suffer in the event of computer system failures, cyber-attacks, or deficiencies in our cyber-security.

business and operations may suffer in the event of computer system failures, cyber-attacks, or deficiencies in our cyber-security.

incidents involving our information technology systems and those of third parties on which we rely have occurred in the past, such as

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business exposes us to potential liability risks, product actions, and other field or regulatory actions that are inherent in the manufacturing,

marketing and sale of medical device, or any other products that we may have commissioned for a target business.

We may be held liable

if such products cause injury or death or are found otherwise unsuitable or defective during usage.

Our products incorporate mechanical

and electrical parts, complex computer software, and other sophisticated components, any of which can contain errors or failures.

computer software is particularly vulnerable to errors and failures, especially when first introduced.

In addition, new products or enhancements

to our existing products may contain undetected errors or performance problems that, despite testing, are discovered only after installation.

any of our commissioned products are defective, whether due to design or manufacturing defects, improper use of the product, or other

reasons, we may voluntarily or involuntarily undertake an action to remove, repair, or replace the product at our expense.

marketing and sale of medical devices, or any other products that we may develop for a target business.

We may be held liable if such

products cause injury or death or are found otherwise unsuitable or defective during usage.

Our products incorporate mechanical and electrical

parts, complex computer software, and other sophisticated components, any of which can contain errors or failures.

Complex computer software

is particularly vulnerable to errors and failures, especially when first introduced.

In addition, new products or enhancements to our

existing products may contain undetected errors or performance problems that, despite testing, are discovered only after installation.

any of our products are defective, whether due to design or manufacturing defects, improper use of the product, or other reasons, we

may voluntarily or involuntarily undertake an action to remove, repair, or replace the product at our expense.

In some circumstances

we will be required to notify regulatory authorities of an action pursuant to a product failure.

cannot ensure that provisions in our customer contracts will be legally sufficient to protect us if we are subjected to legal action.

In addition, our errors and omissions and product liability insurance coverage may not be completely adequate, may not continue to be

available on reasonable terms or in sufficient amounts to cover one or more large claims, or the insurer may disclaim coverage as to

some types of future claims.

The successful assertion of any large claim against us could seriously harm our business.

Even if not successful,

these claims may result in significant legal and other costs, be a distraction to our management and harm our reputation.

of our technologies potential applications for our products will be required and there is no assurance of regulatory approval.

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vary widely from country to country.

rely on highly skilled personnel as a result of the high-tech applications we utilize, and if we are unable to attract, retain, or motivate

qualified personnel, we may not be able to operate our business effectively.

rely on highly skilled personnel, and if we are unable to attract, retain, or motivate qualified personnel, we may not be able to operate

our business effectively.

success depends in large part on continued employment of senior management and key personnel who can effectively operate our business,

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could be adversely affected.

the volatility of our stock price may make our equity compensation less attractive to current and potential employees.

success also depends on our having highly trained financial, technical, R&D, sales, and marketing personnel.

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and federal regulations, or launch new product offerings and would have an adverse effect on our business and financial results.

the volatility of our stock price may make our equity compensation less attractive to current and potential employees.

may be unable to keep pace with changes in technology as our business and market strategy evolves.

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to respond successfully to technological change.

Related to this Offering and Our Common Stock

we have filed an application to list our securities on Nasdaq, there can be no assurance that our securities will be so listed or, if

listed, that we will be able to comply with the continued listing standards.

June 2021 we filed a comprehensive listing application package with The Nasdaq Stock Market, or Nasdaq, to request an uplisting of the

Company’s common stock.

Nasdaq has not approved our application, and there can be no assurance that Nasdaq will approve us for

listing on The Nasdaq Capital Market and, even if our securities are listed, we cannot assure you that we will be able to maintain such

In addition, if after listing, Nasdaq delists our securities from trading on its exchange for failure to meet the continued

listing standards, we and our shareholders could face significant material adverse consequences including a limited availability of market

quotations for our common stock, confirmation that our stock is “penny stock” and subject to increased regulations, and a

decreased ability to issue additional securities or obtain additional financing in the future.

data and information systems and network infrastructure may be subject to hacking or other cybersecurity threats.

If our security measures

are breached and an unauthorized party obtains access to our proprietary business information, our information systems may be perceived

as being insecure, which could harm our business and reputation and our proprietary business information could be misappropriated, which

could have an adverse effect on our business and results of operations.

Company stores and transmits its proprietary information on its computer systems.

Despite our security measures, our information systems

and network infrastructure may be vulnerable to cyber-attacks or could be breached due to an employee error or other disruption that

could result in unauthorized disclosure of sensitive information that has the potential to significantly interfere with our business

Breaches of our security measures could expose us to a risk of loss or misuse of this information, litigation and potential

Since techniques used to obtain unauthorized access or to sabotage information systems change frequently and generally are

not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventive measures

in advance of such an attack on our systems.

In addition, we use third party vendors to store our proprietary information who use cyber

or “cloud” storage of information as part of their service or product offerings, and despite our attempts to validate the

security of such services, our proprietary information may be misappropriated by other parties.

In the event of an actual or perceived

breach of our security, or the security of one of our vendors, the market perception of the effectiveness of our security measures could

be harmed and we could suffer damage to our reputation or our business.

Additionally, misappropriation of our proprietary business information

could prove competitively harmful to our business.

For a description of our cybersecurity risk management and strategy, see Item 1C.

Cybersecurity.

incorporate artificial intelligence, or AI, into some of our products.

This technology is new and developing and may present both compliance

and reputational risks.

we develop our own algorithms and learning capabilities in the artificial intelligence (“AI”) capabilities that we incorporate

into some of our products, and because the software solutions we create, implement, and maintain are often critical to some of our potential

customers’ platforms, we may experience some system and service failures, schedule or delivery delays and other problems in connection

with our AI work.

If we experience these problems, we may lose revenue due to adverse customer reactions, including postponement, cancellation

or failure to renew contracts;

be required to provide additional services to a customer at no charge;

receive negative publicity, which

could damage our reputation and adversely affect our ability to attract or retain customers;

and suffer legal action for substantial

Related to Our Common Stock

the ownership of our Common Stock continues to be highly concentrated, it may prevent you and other minority stockholders from influencing

significant corporate decisions and may result in conflicts of interest.

Arkin, who beneficially owns approximately 55.60% of our Common Stock, holds approximately 44.57% of the current voting power in our

Company and may exercise warrants and options which could increase his voting power to 55.60%.

As a result, Mr.

Arkin will likely control

any action requiring a stockholder vote, including:

the election of directors;

mergers, consolidations and acquisitions;

all or substantially all of our assets and other decisions affecting our capital structure;

the amendment of our amended and restated

certificate of incorporation and our amended and restated bylaws;

and our winding up and dissolution.

This concentration of ownership

may delay, deter or prevent acts that would be favored by our other stockholders.

The interests of Mr.

Arkin may not always coincide

with our interests or the interests of our other stockholders.

This concentration of ownership may also have the effect of delaying,

preventing or deterring a change in control of our Company.

Arkin may seek to cause us to take courses of action that, in his

judgment, could enhance his investment in our Company, but which might involve risks to our other stockholders or adversely affect us

or our other stockholders.

As a result, the market price of our Common Stock could decline or stockholders might not receive a premium

over the then-current market price of our Common Stock upon a change in control.

In addition, this concentration of share ownership may

adversely affect the trading price of our Common Stock because investors may perceive disadvantages in owning shares in a company with

significant stockholders.

we ever list on Nasdaq, we may be considered a “controlled company” within the meaning of Nasdaq rules and, as a result,

may rely on exemptions from certain corporate governance requirements that provide protection to stockholders of other companies.

a result of the concentration of voting power described above, we may be considered a “controlled company”, for example by

Nasdaq if we ever list on The Nasdaq Stock Market, which we do not expect to be able to do, if ever, until after we file our Annual Report

on Form 10-K for the fiscal year ended December 31, 2023 in March or April 2024, at the earliest.

Under these rules, a listed company

of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and

may elect not to comply with certain corporate governance requirements, including:

the requirement that a majority of our board of directors

consist of “independent directors” as defined under the rules of Nasdaq;

the requirement that we have a compensation committee

that is composed entirely of directors who meet the Nasdaq independence standards for compensation committee members;

and the requirement

that our director nominations be made, or recommended to our full board of directors, by our independent directors or by a nominations

committee that consists entirely of independent directors.

no decision has been made about whether or not to rely on such exemptions, if we do rely on any or all of these exemptions, you may not

have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

resales of Common Stock may cause the market price of our Common Stock to drop significantly, even if our business is doing well.

of a substantial number of shares of our Common Stock in the public market could occur at any time, including by Mr.

Moshe Arkin, our

largest shareholder, and other significant shareholders.

These sales, or the perception in the market that such sales can occur, could

reduce the market price of our Common Stock and increase the volatility in the market price of our Common Stock.

Further, the sale of

a substantial portion of shares of our Common Stock could result in a change of control, which could impact the market price and liquidity

of our Common Stock.

on the OTC Markets is volatile, sporadic and often thin, which could depress the market price of our Common Stock and make it difficult

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of securities listed on a stock exchange like NASDAQ or the NYSE.

Our common stock has a history of thin trading.

During the 52-week

period ended December 31, 2022, trades were only reported on 37 trading days.

These factors may result in investors having difficulty

reselling any shares of our common stock .

Although in June 2021 we filed an application with The Nasdaq Stock

Market to list our Common Stock, we did not complete the process and do not expect to be able to do so, if ever, until after we file

our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 in March or April 2024, at the earliest.

Our Common Stock

has a history of thin trading.

During the 52-week period ended February 29, 2024, trades were only reported on 78 trading days.

factors may result in investors having difficulty reselling any shares of our Common Stock .

Anti-takeover

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by us or our competitors of acquisitions, investments or strategic alliances;

or anticipated impact of military conflict, including the conflict between Russia and Ukraine, terrorism or other geopolitical events;

or anticipated impact of military conflict, including the conflict between Russia and Ukraine, Israel’s war or conflicts with

Hamas or Lebanon, terrorism or other geopolitical events;

imposed by the United States and other countries in response to such conflicts, including the one in Ukraine, may also adversely

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or to settle litigation.

our common stock may be deemed a “penny stock,” it may be more difficult for investors to sell shares of our common stock,

and the market price of our common stock may be adversely affected.

common stock may be a “penny stock” if, among other things, the stock price is below $5.00 per share, it is not listed on

a national securities exchange, or it has not met certain net tangible asset or average revenue requirements.

Broker-dealers who sell

penny stocks must provide purchasers of these stocks with a standardized risk-disclosure document prepared by the SEC.

This risk-disclosure

document provides information about penny stocks and the nature and level of risks involved in investing in the penny-stock market.

broker must also give a purchaser, orally or in writing, bid and offer quotations and information regarding broker and salesperson compensation,

make a written determination that the penny stock is a suitable investment for the purchaser and obtain the purchaser’s written

agreement to the purchase.

Broker-dealers must also provide customers that hold penny stock in their accounts with such broker-dealer

a monthly statement containing price and market information relating to the penny stock.

If a penny stock is sold to an investor in violation

of the penny stock rules, the investor may be able to cancel its purchase and get their money back.

applicable, the penny stock rules may make it difficult for stockholders to sell their shares of our common stock.

Because of the rules

and restrictions applicable to a penny stock, there is less trading in penny stocks and the market price of our common stock may be adversely

Common Stock is currently a “penny stock,” which imposes additional sales practice requirements on broker-dealers that sell

such securities.

SEC has adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price

less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions.

Our Common Stock is currently

a “penny stock” and is subject to Rule 15g-9 under the Securities Exchange Act of 1934, or the Penny Stock Rule.

imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers

and “accredited investors” (generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000,

or $300,000 together with their spouses).

For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination

for the purchaser and have received the purchaser’s written consent to the transaction prior to sale.

As a result, this rule may

affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in

the secondary market, thus possibly making it more difficult for us to raise additional capital.

any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in penny stock, of a disclosure

schedule required by the SEC relating to the penny stock market.

Disclosure is also required to be made about sales commissions payable

to both the broker-dealer and the registered representative and current quotations for the securities.

Finally, monthly statements are

required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market

in penny stock.

can be no assurance that our Common Stock will qualify for exemption from the Penny Stock Rule.

Even if our Common Stock were exempt

from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Securities Exchange Act of 1934, or the Exchange Act, which

gives the SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a

restriction would be in the public interest.

penny stock rules may make it difficult for stockholders to sell their shares of our Common Stock.

Because of the rules and restrictions

applicable to a penny stock, there is less trading in penny stocks and the market price of our Common Stock may be adversely affected.

Also, many brokers choose not to participate in penny stock transactions.

Accordingly, stockholders may not always be able

to resell their shares of our common stock publicly at times and prices that they feel are appropriate.

Accordingly, stockholders may not always be able to resell

their shares of our Common Stock publicly at times and prices that they feel are appropriate.

with the reporting requirements of federal securities laws can be expensive.

are a public reporting company in the United States, and accordingly, subject to the information and reporting requirements of the Securities

Exchange Act of 1934 and other federal securities laws.

The costs of preparing and filing annual and quarterly reports and other information

with the SEC and furnishing audited reports to stockholders are substantial.

Failure to comply with the applicable securities laws could

result in private or governmental legal action against us or our officers and directors, which could have a detrimental impact on our

business and financials, the value of our stock, and the ability of stockholders to resell their stock.

are a public reporting company in the United States, and accordingly, subject to the information and reporting requirements of the Exchange

Act, and other federal securities laws.

The costs of preparing and filing annual and quarterly reports and other information with the

SEC and furnishing audited reports to stockholders are substantial.

Failure to comply with the applicable securities laws could result

in private or governmental legal action against us or our officers and directors, which could have a detrimental impact on our business

and financials, the value of our stock, and the ability of stockholders to resell their stock.

investors’ ownership in the Company may be diluted in the future.

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We have in the past and may continue to issue a substantial number of shares of Common Stock or other securities

convertible into or exercisable for common stock in connection with capital raising activity, hiring or retaining employees, future acquisitions,

raising additional capital in the future to fund our operations, and other business purposes.

We expect to authorize in the future a

substantial number of shares of our common stock for issuance under a stock option or similar plan, and may issue equity awards to management,

employees and other eligible persons.

Additional shares of common stock issued by us in the future will dilute an investor’s investment

in the Company.

In addition, we may seek stockholder approval to increase the amount of the Company’s authorized stock, which would

create the potential for further dilution of current investors.

convertible into or exercisable for Common Stock in connection with capital raising activity, hiring, or retaining employees, future

acquisitions, raising additional capital in the future to fund our operations, and other business purposes.

We expect to authorize in

the future a substantial number of shares of our Common Stock for issuance under a stock option or similar plan, and may issue equity

awards to management, employees, and other eligible persons.

Additional shares of Common Stock issued by us in the future will dilute

an investor’s investment in the Company.

In addition, we may seek stockholder approval to increase the amount of the Company’s

authorized stock, which would create the potential for further dilution of current investors.

executive officers, principal stockholders, and affiliated entities own a significant percentage of our capital stock, and they may make

decisions that our stockholders do not consider to be in their best interests.

As of March 28, 2023, our directors,

executive officers, principal stockholders, and affiliated entities may be deemed to beneficially own, in the aggregate, approximately

84.40% of our outstanding voting securities.

As a result, if some or all of such parties acted together, they would have the ability

to exert substantial influence over the election of our board of directors and the outcome of issues requiring approval by our stockholders.

This concentration of ownership may also have the effect of delaying or preventing a change in control of the Company that may be favored

by other stockholders.

This could prevent transactions in which stockholders might otherwise recover a premium for their shares over current

market prices.

This concentration of ownership and influence in management and board decision-making could also harm the price of our

capital stock by, among other things, discouraging a potential acquirer from seeking to acquire shares of our capital stock (whether by

making a tender offer or otherwise) or otherwise attempting to obtain control of our Company.

of March 26, 2024, our directors, executive officers, principal stockholders, and affiliated entities may be deemed to beneficially

own, in the aggregate, approximately 84.11% of our outstanding voting securities.

As a result, if some or all of such parties acted

together, they would have the ability to exert substantial influence over the election of our board of directors and the outcome of issues

requiring approval by our stockholders.

This concentration of ownership may also have the effect of delaying or preventing a change in

control of the Company that may be favored by other stockholders.

This could prevent transactions in which stockholders might otherwise

recover a premium for their shares over current market prices.

This concentration of ownership and influence in management and board

decision-making could also harm the price of our capital stock by, among other things, discouraging a potential acquirer from seeking

to acquire shares of our capital stock (whether by making a tender offer or otherwise) or otherwise attempting to obtain control of our

do not anticipate paying any cash dividends in the foreseeable future.

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and form of future dividends, if any, will depend on our future results of operations and cash flow, our capital requirements and surplus,

the amount of distributions, if any, received by us from our subsidiary, our financial condition, contractual restrictions, and other

factors deemed relevant by our board of directors.

the amount of distributions, if any, received by us from our wholly-owned subsidiary Odysight.ai Ltd., our financial condition, contractual

restrictions, and other factors deemed relevant by our board of directors.

Related to our Operations in Israel

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and military conditions affecting Israel at any given time.

economic and military instability in Israel may impede our ability to operate and harm our financial results.

in Israel, including the October 7, 2023 attack by Hamas and other terrorist organizations and Israel’s war against them, if escalated,

could negatively affect our operations.

offices and management team are located in Israel.

Accordingly, political, economic, and military conditions in Israel and the surrounding

region may directly affect our business and operations.

Since the establishment of the State of Israel in 1948, a number of armed conflicts

have occurred between Israel and its neighboring countries.

We have never experienced any material interruption in our operations attributable

to these factors, in spite of several Middle East crises, including wars.

A change in the security and political situation in Israel

and in the economy could have a material adverse effect on our business, operating results, and financial condition.

recent years, Israel has been subject to certain political instability and increased number of elections were held.

Accordingly, our business and operations may be affected by economic, political, geopolitical

and military conditions in Israel.

Since the establishment of the State of Israel in 1948, a number of armed conflicts have occurred

between Israel and its neighboring countries and Muslim based terrorist organizations active in the region.

These conflicts have involved

missile strikes, hostile infiltrations and terrorism against civilian targets in various parts of Israel, which from time to time have

negatively affected business conditions in Israel.

October 7, 2023, the Hamas organization launched a series of deadly terror attacks on civilian and military targets skirting the Gaza

Strip in the southern part of Israel and fired rockets on many of the communities in southern and central Israel.

Following the attack,

Israel’s security cabinet declared war and commenced a military campaign in Gaza against Hamas.

Since the outbreak of the war,

the Hezbollah terrorist organization has regularly fired rockets into northern Israel, other terrorist organizations have done so from

western Iraq and the Houthis terrorist organization operating out of Yemen has fired various projectiles and drones against commercial

shipping vessels in the Gulf of Aden and Red Sea.

Moreover, these conditions may escalate in the future into a greater regional conflict.

war has led to consequences and restrictions with respect to the Israeli economy, including a significant call-up of military reservists,

most of whom have been released from such service as of the date of this Annual Report.

However, to date the war has not had a material

adverse effect on our business.

While our executive offices are located in Omer and Ramat Gan, Israel, neither of our sites is located

near Israel’s relevant borders where the main impact of the war has been felt.

Nevertheless, we have experienced some minor disruptions

to our routine work, including some difficulties in traveling outside of Israel in the first month of the war and occasional rocket fire

on municipalities where our offices are located, requiring our employees to take temporarily shelter for a few minutes at a time in on-site

In addition, several of our employees, including company officers such as our CEO Yehu Ofer, were called up to military reserve

duty, with many such call-ups having since lapsed.

As of the date of this Annual Report, Mr.

Ofer is subject to military reserve duty

a few days a month.

We have taken various measures to mitigate the effects of the war, including adopting work-from-home measures, increased

employee overtime and third-party outsourcing where needed, and reviewing our business continuity plan.

case of material escalation of current conditions or the outbreak of a greater regional conflict, it is possible that there will be further

military reserve duty call-ups, which may negatively affect our business due to a shortage of skilled labor and loss of institutional

Were such an escalation to occur, the steps we have taken to mitigate the effects of the war may not be sufficient to prevent

material adverse impacts our business, financial condition and results of operations.

In addition, although the intensive flight hours

flown by all Israeli Air Force platforms as a result of the war has caused an increase of interest in our technology from Israeli government

agencies and R&D programs, we may not be successful in turning these expressions of interest into orders for our products.

is currently not possible to predict the duration or severity of the ongoing war or its effects on our business, operations and financial

The ongoing conflict is rapidly evolving and developing, and could disrupt our business and operations, interrupt our sources

and availability of supply and hamper our ability to raise additional funds or sell our securities, among other possible negative effects.

instances of political, economic or military instability in Israel, if escalated, could impede our ability to operate and harm our financial

addition to the ongoing war with Hamas, other political, economic, and military conditions in Israel and the surrounding region may directly

affect our business and operations.

Since the establishment of the State of Israel in 1948, a number of armed conflicts have occurred

between Israel and its neighboring countries.

We have never experienced any material interruption in our operations attributable to these

factors, in spite of several Middle East crises.

A change in the security and political situation in Israel and in the economy could

have a material adverse effect on our business, operating results, and financial condition.

recent years, Israel has been subject to certain political instability and an increased number of elections were held.

Actual or perceived

1 unchanged sentence

affect the Israeli economy and, in turn, our business, financial condition, results of operations and growth prospects.

Israel is still

engaged in sporadic armed conflicts with Hamas, an Islamist terrorist group that controls the Gaza Strip, with Hezbollah, an Islamist

terrorist group that controls large portions of southern Lebanon, and with Iranian-backed military forces in Syria.

In addition, Iran

has threatened to attack Israel and may be developing nuclear weapons.

Some of these hostilities were accompanied by missiles being fired

from the Gaza Strip against civilian targets in various parts of Israel, including areas in which our employees and some of our consultants

are located, and negatively affected business conditions in Israel.

Any hostilities involving Israel or the interruption or curtailment

of trade between Israel and its trading partners could adversely affect our operations and results of operations.

Changes in the

Israeli economy could make it more difficult for us to operate our business and could have a material adverse effect on our business,

reputation, financial condition, results of operation and cash flow.

the beginning of 2023, the newly formed government commenced a legislative process to effect changes in the Israeli legal system.

financial, legal, and commercial organizations and entities have claimed that such changes will weaken the Israeli legal system and,

as a result, could lead to negative impact on the economic and financial conditions of the State of Israel.

At this stage, where most

of the proposed legislation has not become effective and its scope is not fully determined, we cannot assess the likelihood of the legislation

going into effect or the possible impact of these changes.

addition to Hamas, Israel is engaged in sporadic armed conflicts with Hezbollah, an Islamist terrorist group that controls large portions

of southern Lebanon, and with Iranian-backed military forces in Syria.

In addition, Iran has threatened to attack Israel and may be developing

nuclear weapons.

Some of these hostilities have been accompanied by missiles being fired from Lebanon against civilian targets in various

parts of Israel, including areas in which some of our employees and consultants may be located, and negatively affected business conditions

The global shipping industry is also experiencing disruptions due attacks by Houthi militants from Yemen on commercial shipping

in the Gulf of Aden and Red Sea, which has caused the rerouting of shipping away from the Suez Canal.

Any hostilities involving Israel

or the interruption or curtailment of trade between Israel and its trading partners could adversely affect our operations and results

of operations.

commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism.

4 unchanged sentences

incurred by us could have a material adverse effect on our business.

Any armed conflicts or political instability in the region would

Any armed conflict or political instability in the region would

likely negatively affect business conditions and could harm our results of operations.

1 unchanged sentence

Several countries still restrict business

with the State of Israel and with Israeli companies.

These restrictive laws and policies may have an adverse impact on our operating

results, financial condition, or the expansion of our business.

A campaign of boycotts, divestment, and sanctions has been undertaken

against Israel, which could also adversely impact our business.

addition, many Israeli citizens are obligated to perform several days, and in some cases more, of annual military reserve duty each year

until they reach the age of 40 (or older, for reservists who are military officers or who have certain occupations) and, in the event

of a military conflict, may be called to active duty.

In response to increases in terrorist activity, there have been periods of significant

call-ups of military reservists.

It is possible that there will be military reserve duty call-ups in the future.

Our operations could

be disrupted by such call-ups, which may include the call-up of members of our management.

Such disruption could materially adversely

affect our business, prospects, financial condition, and results of operations.

the beginning of 2023, the newly formed government commenced a legislative process to effect changes in the Israeli legal system.

financial, legal, and commercial organizations and entities have claimed that such changes will weaken the Israeli legal system and,

as a result, could lead to negative impact on the economic and financial conditions of the State of Israel.

At this stage, where the

proposed legislation has not become effective, and its scope is not fully determined, we cannot assess the possible impacts of these

changes and their likelihood.

Changes in the Israeli economy could make it more difficult for us to operate our business and could have

a material adverse effect on our business, reputation, financial condition, results of operation, and cash flow.

with the State of Israel and with Israeli companies and may do so in the future as a result of the war with Hamas or for other reasons.

These restrictive laws and policies may have an adverse impact on our operating results, financial condition, or the expansion of our

A campaign of boycotts, divestment and sanctions has been undertaken against Israel, which could also adversely impact our

Israeli citizens are also obligated to perform several days, and in some cases more, of annual military reserve duty each year until

they reach the age of 40 (or older, for reservists who are military officers or who have certain occupations) and, in the event of a

military conflict, may be called to active duty.

As has been the case with the ongoing war with Hamas, in response to increases in terrorist

activity, there have been periods of significant call-ups of military reservists.

It is possible that there will be additional military

reserve duty call-ups in the future.

Our operations could be disrupted by such call-ups, which may include the call-up of members of

our management.

Such disruption could materially adversely affect our business, prospects, financial condition, and results of operations.

may be difficult for investors in the United States to enforce any judgments obtained against us or some of our directors or officers.

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Volatility in exchange

rates and global financial markets is expected to continue due to political and economic uncertainty globally

rates and global financial markets is expected to continue due to the ongoing global political and economic uncertainty.

technology developed and used by us received Israeli government grants for certain research and development activities.

those grants require us to satisfy specified conditions in addition to repayment of the grants upon certain events.

research and development efforts that contributed to certain technology used by us was financed in part through grants from the IIA to

Medigus, which was subsequently transferred to ScoutCam Ltd.

(for more information about such agreements, refer to – “CERTAIN

RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE” below”).

The terms of such grants require ScoutCam Ltd.

to comply with the requirements of the Innovation Law.

When a company develops know-how, technology or products using IIA grants, the

terms of these grants and the Innovation Law restrict the transfer outside of Israel of such know-how, and the manufacturing or manufacturing

rights of such products, technologies or know-how, without the prior approval of the IIA.

Therefore, if aspects of our technologies are

deemed to have been developed with IIA funding, the discretionary approval of an IIA committee would be required for any transfer to

third parties outside of Israel of know-how or manufacturing or manufacturing rights related to those aspects of such technologies.

may not receive those approvals.

Furthermore, the IIA may impose certain conditions on any arrangement under which it permits us to transfer

technology or development out of Israel.

research and development efforts that contributed to certain technology used by us was financed in part through grants from the Israel

Innovation Authority (“IIA”) to Medigus, which was subsequently transferred to Odysight.ai (for more information about such

agreements, refer to – “CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS” below).

The terms of such grants require

Odysight.ai to comply with the requirements of the Innovation Law.

When a company develops know-how, technology or products using IIA

grants, the terms of these grants and the Innovation Law restrict the transfer outside of Israel of such know-how, and the manufacturing

or manufacturing rights of such products, technologies or know-how, without the prior approval of the IIA.

Therefore, if aspects of our

technologies are deemed to have been developed with IIA funding, the discretionary approval of an IIA committee would be required for

any transfer to third parties outside of Israel of know-how or manufacturing or manufacturing rights related to those aspects of such

technologies.

We may not receive those approvals.

Furthermore, the IIA may impose certain conditions on any arrangement under which it

permits us to transfer technology or development out of Israel.

transfer of IIA-supported technology or know-how or manufacturing or manufacturing rights related to aspects of such technologies outside

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as a merger or similar transaction) may be reduced by any amounts that we are required to pay to the IIA.

Company has applied for and been awarded an additional IIA-funded grant, to support and enhance the Company’s production capabilities.

Subject to successfully achieving certain predetermined milestones, the Company will receive a maximum grant amount of NIS 1 million.

The grant shall subject the Company to certain restrictions on transfer of manufacturing rights and know-how outside of Israel and will

require royalty payments on revenues derived from sales of the products developed from the IIA funding.

may become subject to claims for remuneration or royalties for assigned service invention rights by our employees, which could result

in litigation and adversely affect our business.

significant portion of our intellectual property has been developed by our employees in the course of their

employment for us.

Under the Israeli Patent Law, 5727-1967, or the Patent Law, inventions conceived by an employee in the course and

as a result of or arising from his or her employment with a company are regarded as “service inventions,” which belong to

the employer, absent a specific agreement between the employee and employer giving the employee service invention rights.

Law also provides that if there is no such agreement between an employer and an employee, the Israeli Compensation and Royalties Committee,

or the Committee, a body constituted under the Patent Law, will determine whether the employee is entitled to remuneration for his inventions.

Recent case law clarifies that the right to receive consideration for “service inventions” can be waived by the employee

and that in certain circumstances, such waiver does not necessarily have to be explicit.

The Committee will examine, on a case-by-case

basis, the general contractual framework between the parties, using interpretation rules of the general Israeli contract laws.

the Committee has not yet determined one specific formula for calculating this remuneration (but rather uses the criteria specified in

the Patent Law).

Although we generally enter into assignment-of-invention agreements with our employees pursuant to which such individuals

assign to us all rights to any inventions created in the scope of their employment or engagement with us, we may face claims demanding

remuneration in consideration for assigned inventions.

As a consequence of such claims, we could be required to pay additional remuneration

or royalties to our current and/or former employees, or be forced to litigate such claims, which could negatively affect our business.

unresolved staff comments

significant portion of our intellectual property has been developed by our employees in the course of their employment for us.

the Israeli Patent Law, 5727-1967, or the Patent Law, inventions conceived by an employee in the course and as a result of or arising

from his or her employment with a company are regarded as “service inventions,” which belong to the employer, absent a specific

agreement between the employee and employer giving the employee service invention rights.

The Patent Law also provides that if there

is no such agreement between an employer and an employee, the Israeli Compensation and Royalties Committee, or the Committee, a body

constituted under the Patent Law, will determine whether the employee is entitled to remuneration for his inventions.

Recent case law

clarifies that the right to receive consideration for “service inventions” can be waived by the employee and that in certain

circumstances, such waiver does not necessarily have to be explicit.

The Committee will examine, on a case-by-case basis, the general

contractual framework between the parties, using interpretation rules of the general Israeli contract laws.

Further, the Committee has

not yet determined one specific formula for calculating this remuneration (but rather uses the criteria specified in the Patent Law).

Although we generally enter into assignment-of-invention agreements with our employees pursuant to which such individuals assign to us

all rights to any inventions created in the scope of their employment or engagement with us, we may face claims demanding remuneration

in consideration for assigned inventions.

As a consequence of such claims, we could be required to pay additional remuneration or royalties

to our current and/or former employees, or be forced to litigate such claims, which could negatively affect our business.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors