What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-19 compared with 2025-03-26 · 191 added, 203 removed, 136 unchanged (74% of the section changed)

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Following this acquisition, we integrated and fully adopted the acquired miniaturized imaging

business into us as our primary business activity.

business as our primary business activity.

On June 5, 2023, we changed our name to Odysight.ai Inc.

are a pioneer in the development, production and marketing of an innovative visualization and artificial intelligence, or AI, solution

that deploys small cameras to monitor critical safety components in hard-to-reach locations and harsh environments, across various Predictive

Maintenance, or PdM, and Condition Based Monitoring, or CBM, use cases.

Odysight TruVision solution streams visual information to our processing unit, an in-platform, high-performance AI/machine learning

computer, allowing maintenance and operations teams, on the ground and during operations, visibility into areas that are inaccessible

under normal operating conditions or where conditions are not suitable for continuous real-time monitoring.

The rich and informative

data, continuously collected and analyzed by our solution on our secured cloud, provides customers with real-time failure / anomaly detection,

events and data recordings, interfacing with platform mission systems and providing real-time alerts and streaming video or images, all

while training our algorithms for ongoing improved accuracy and prediction capabilities.

Our customers benefit from increased safety,

a reduction in downtime and lower maintenance costs for their monitored platforms, using the prediction capabilities of our solution

to efficiently plan maintenance work on monitored components.

solution aims to enhance safety and minimizes downtime by enabling real-time visual analysis of any failure occurrences.

Additionally,

we leverage advanced big data analytics to offer predictive insights throughout the entire system lifecycle.

This includes efficient

spare parts management and intelligent performance predictions, ensuring optimal system reliability and efficiency.

Odysight TruVision solution is successfully used by NASA as we seek to reshape the aerospace, Industry 4.0, transportation and

energy markets with a vison-based technology leveraging AI and machine learning to deliver innovative solutions that transform maintenance

As used in this Annual Report, Industry 4.0, or I4.0, refers to the integration of advanced technologies into manufacturing and industrial

processes to create smart, interconnected systems for improved efficiency and productivity.

Odysight solutions

are already deployed in the aviation and medical sectors.

Our customers include the Israeli Air Force, the Israeli Ministry of

Defense, France-based Safran Aircraft Engines, a global international defense contractor, a leading Fortune 500 medical company as

well as NASA, who came back to us for a repeat order.

On February 11, 2025, our common stock began trading on the Nasdaq Capital Market under the symbol “ODYS”.

are a pioneer in the development, production and marketing of innovative visual monitoring artificial intelligence, or AI, solutions

that deploys small visual sensors to monitor critical safety components in hard-to-reach locations and harsh environments, across

various Predictive Maintenance, or PdM, and Condition Based Monitoring, or CBM, use cases applied both for the civil and defense

We aim to be the industry benchmark for real-time, visual-based machine and infrastructure health monitoring and predictive

maintenance analysis through AI and machine learning data analytics.

solutions stream visual information to our processing unit, an in-platform, high-performance AI/ML (machine learning) computer, allowing maintenance

and operations teams, on the ground and during operations, visibility into areas that are inaccessible under normal operating conditions

or where conditions are not suitable for continuous monitoring.

The data, continuously collected and analyzed

by our solution on our secured cloud, provides customers with real-time failure / anomaly detection, events and data recordings, interfacing

with platform mission systems and providing real-time alerts and streaming video or images, all while training our algorithms for ongoing

improved accuracy and prediction capabilities.

Our customers benefit from increased safety, a reduction in downtime, a more efficient

data driven operation, increased mission readiness and lower maintenance costs for their monitored platforms, using the prediction capabilities

of our solution to efficiently plan maintenance work on monitored components.

solution aims to enhance safety and minimize costly downtime by enabling real-time visual analysis of any failure occurrences and to leverage advanced big data analytics to offer predictive insights throughout the entire system lifecycle.

This includes

efficient spare parts management and intelligent performance predictions, ensuring optimal system reliability and

solutions are already deployed in the industrial, automotive and aviation sectors.

Our customers include the Israeli Air Force, the

Israeli Ministry of Defense, a global international defense contractor, NASA and Israel Railways Ltd., as well as a leading

European provider of elevator monitoring solutions.

Historically, our revenue stream has been derived mainly from the medical

Our 2024 financial results reflect orders and agreements from both the medical and aerospace sectors.

We have recently

secured several contracts for our PdM and CBM systems with major government clients and defense and aviation companies and our

backlog as of December 2024 of approximately $15 million (compared to approximately $2.6 million as of December 31, 2023) reflects

mostly those contracts.

Public Offering and Nasdaq Listing

2025, we closed a public offering, including the exercise of an over-allotment option granted to the underwriter in the public

Offering and Nasdaq Listing

February 2025, we closed a public offering, including the exercise of an over-allotment option granted to the underwriter in the public

The public offering and the over-allotment option exercise price was $6.50 per share.

In the aggregate, we sold a total of

3,653,124 shares of common stock, generating gross proceeds of approximately $23.7 million, prior to the deduction of underwriting

discounts, commissions and estimated offering expenses.

Also in February 2025, listing was approved for our common stock, which

began trading on the Nasdaq Capital Market under the symbol “ODYS”.

3,653,124 shares of common stock, generating gross proceeds of approximately $23.7 million, prior to the deduction of underwriting discounts,

commissions and estimated offering expenses.

After deducting issuance costs, we received proceeds of approximately $20.9 million.

in February 2025, our common stock began trading on the Nasdaq Capital Market under the symbol “ODYS”.

of the Ongoing War in Israel on Our Business

October 7, 2023, the Hamas terrorist 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 and, in October 2024, Israel invaded southern

Lebanon in response to these attacks.

On November 27, 2024, Israel and Lebanon agreed to a ceasefire, the

result of which is uncertain.

During the course of the war, other terrorist organizations have fired rockets into Israel, such as

various rebel militia groups in Syria and Iraq and the Houthi movement, which controls parts of Yemen.

The Houthis movement has also

attacked commercial shipping vessels in the Gulf of Aden and Red Sea.

In April and October 2024, the Islamic Republic of Iran

targeted various sites in Israel with waves of drones, cruise missiles and ballistic missiles.

Israel responded on both occasions

with air defenses and retaliatory strikes against Iran.

war has had significant economic, military and social consequences to Israel.

To date the war has not had a material adverse effect on

our business.

While we have offices 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 and occasional rocket fire on the municipalities where our offices are located, requiring

our employees to take temporarily shelter for a few minutes at a time in on-site safe rooms.

In addition, several of our executives and

employees, including company officers such as our CEO, were called up to military reserve duty.

As of the date of this Annual Report,

our CEO 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

In addition, with the backdrop of the ongoing conflict, some of our Israeli clients and potential clients have not prioritized

conducting transactions with us, and the war may have caused some delays in their finalizing purchase orders.

We do not believe that

such delays have had a material impact on our business.

The war has also increased negative sentiments regarding Israel and Israeli companies

in the international community.

For example, Israeli defense companies were initially banned from participating in two prestigious industry

conferences in France during 2024;

however, both bans were later overturned by French courts and did not impact our participation in

such conferences.

as a result of the intensive flight hours flown by all Israeli Air Force platforms as a result of the war and an enhanced Israel Ministry

of Defense budget, we have experienced a growing interest in our technology from Israeli government agencies and R&D programs, which

may lead to more rapid assimilation of our technology into relevant platforms than we had anticipated prior to the commencement of the

war, positively affecting on our business activity.

See also “Item 1A.

Risk Factors – Risks Related to our Operations

in Israel – Our headquarters and other significant operations are located in Israel and, therefore, our results may be adversely

affected by political, economic and military instability in Israel .”

October 7, 2023, the Hamas terrorist organization launched a series of terror attacks on civilian and military targets in southern Israel.

Since then, Israel has been involved in an ongoing military campaign and has faced hostilities on multiple fronts, including regular

rocket and drone attacks and threats from Hamas in the Gaza Strip, Hezbollah in Lebanon, the Houthi movement in Yemen and other terrorist

organizations active in the region.

While Israel and Hamas reached a ceasefire framework in October 2025 contemplating a permanent end

to that conflict, there is no assurance the agreement will hold.

Furthermore, the regional security situation escalated significantly

in late February 2026, following preemptive strikes by Israel and the United States against Iranian nuclear and ballistic capabilities.

In response, Iran launched missile and drone attacks toward population centers and military installations in Israel, Europe and neighboring

countries in the Gulf region, and also launched counter-strikes against U.S.

forces and allied bases throughout the Gulf region.

in early March 2026, Hezbollah initiated further missile strikes against Israel, leading to retaliatory strikes and limited ground incursions

into Lebanon.

war has had economic, military and social consequences for Israel.

While the conflict has not had a material adverse effect on our business

to date, we have experienced disruptions to our routine work, including travel limitations and occasional rocket fire requiring employees

at our Omer and Ramat Gan offices to take temporary shelter in on-site safe rooms.

Pursuant to instructions from Israel’s Home

Front Command, our offices were closed on certain days during the current conflict with Iran and Hezbollah.

Additionally,

several of our executives and employees have been called up to military reserve duty, including our CEO, who was subject to reserve duty

a few days a month until recent months.

To mitigate these effects, we have adopted work-from-home measures, increased employee

overtime and utilized third-party outsourcing where necessary.

ongoing conflict has influenced our commercial environment in the following ways:

● Customer Prioritization :

During more intense

periods of the conflict, some Israeli clients have prioritized other matters, which has caused

occasional delays in finalizing purchase orders.

These delays have had

a temporary impact on our business.

● Defense Technology

Conversely, due to intensive flight hours flown by the Israeli Air Force and an enhanced Ministry of Defense budget,

we have seen growing interest in our technology from Israeli government agencies and R&D programs.

This may lead to a more rapid

assimilation of our technology into relevant platforms than previously anticipated.

● International

The war has increased negative sentiments regarding Israel and Israeli companies internationally, including efforts to

boycott Israeli goods and services and specific efforts targeting Israeli defense firms.

While we have faced challenges, such as initial

bans from industry conferences that were later overturned, these efforts have not impacted our participation in such events to date.

security situation remains fluid.

Any renewed military actions, intensified boycotts or government-imposed measures could adversely affect

our operations, supply chains and financial condition.

Accounting Policies and Estimates

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may differ from these estimates under different assumptions or conditions.

our significant accounting policies are more fully described in Note 2 to our financial statements appearing elsewhere in this

Annual Report, we believe that the following accounting policies are the most critical for fully understanding and evaluating our financial

our significant accounting policies are more fully described in Note 2 to our financial statements appearing elsewhere in this Annual

Report, we believe that the following accounting policies are the most critical for fully understanding and evaluating our financial

condition and results of operations.

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Revenues are presented

We recognize revenue

when a customer obtains control over promised goods or services.

For each performance obligation, we determine at contract inception

whether it satisfies the performance obligation over time or satisfies the performance obligation at a point in time.

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

For each performance obligation, we determine 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:

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a performance obligation is not satisfied over time, we satisfy the performance obligation at a point in time.

Revenues from

product customization and development contracts in which the performance obligation is satisfied over time are recognized over the

from product customization and development contracts in which the performance obligation is satisfied over time are recognized over the

duration of the contract and commensurate with the progress of services.

We measure the progress of services using the input

method, based on the effort expended relative to the estimated total effort to satisfy the performance obligation.

Revenues 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.

We measure the progress of services using the input method,

based on the effort expended relative to the estimated total effort to satisfy the performance obligation.

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.

apply the fair value recognition provisions of ASC 718, Compensation—Stock Compensation , or ASC 718, for stock-based awards

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requisite service period, and forfeitures are accounted for as they occur.

is derived from the historical volatility of publicly traded set of peer companies.

The risk-free interest rates used in the Black-Scholes

calculations are based on the prevailing U.S.

Treasury yield as determined by the U.S.

Volatility is derived from a blend of the Company’s volatility and historic volatility of a publicly traded set of peer

The risk-free interest rates used in the Black-Scholes calculations are based on the prevailing U.S.

Treasury yield as

determined by the U.S.

Federal Reserve.

We have not paid dividends and

does not anticipate paying dividends in the foreseeable future.

Accordingly, no dividend yield was assumed for purposes of estimating

the fair value of our stock-based compensation.

The weighted average expected life of options was estimated individually in respect of

We have not paid dividends and does not anticipate paying dividends in the foreseeable

Accordingly, no dividend yield was assumed for purposes of estimating the fair value of our stock-based compensation.

weighted average expected life of options was estimated individually in respect of each grant.

of the Year Ended December 31, 2025 and the Year Ended December 31, 2024

primary business activity in 2024 was enlarging our focus on R&D activities in the domain of Industry 4.0, including PdM and CBM in sectors such as aerospace, maritime energy and other heavy

machinery, engines and complicated mechanics which require ongoing monitoring and predictive maintenance applications.

effect of this activity enabled us to accelerate our growth and support an increased workload and solution

development for customers.

primary business activity in 2025 was enlarging our focus on activities in the domain of Industry 4.0, including PdM and CBM in sectors

such as aerospace, transportation and other heavy machinery, engines and complicated mechanics that require ongoing monitoring and predictive

maintenance applications.

The main effect of this activity was to support our planned accelerated growth, and solution quality and development.

following table summarizes our results of operations for the years ended December 31, 2025 and 2024, together with the changes in those

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Cost of Revenues

Gross Profit (Loss)

Research and development expenses

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(12,507,000 )

a result of the nature of our target market and the current stage of our development, a substantial portion of our revenue comes from

a limited number of customers.

the year ended December 31, 2024, we generated revenues of $3,964,000, an increase of $931,000, or 31%, from 2023 revenues.

increase in revenues was primarily due to an increase in revenues from our vision-based platform solutions for PdM and

of revenues for the year ended December 31, 2024, were $2,807,000 an increase of $283,000, or 11%, compared to cost of revenues of $2,524,000

for the year ended December 31, 2023.

increase in cost of revenues was primarily due to an increase in revenues.

profit for the year ended December 31, 2024 was $1,157,000, an increase of $648,000, or 127%, compared to a gross profit of $509,000

a result of the nature of our target market and the current stage of the deployment of our solutions, a substantial portion of our revenue comes

from a limited number of customers.

the year ended December 31, 2025, we generated revenues of $3,015,000, a decrease of $949,000, or 24%, from 2024 revenues.

for the year ended December 31, 2025 were primarily comprised of:

derecognition of the contract liability associated with the Fortune 500 medical company customer, in the amount of $1.7 million,

as described in Note 9(a)(1) to financial statements, and

million in revenues from our vision-based platform solutions for PdM and CBM.

for the year ended December 31, 2024 were primarily comprised of:

million in revenues from products sold to the Fortune 500 medical company customer, and

million in revenues from our vision-based platform solutions for PdM and CBM.

of revenues is primarily comprised of cost of personnel, certain allocated expenses related to facilities, logistics and quality control.

of revenues for the year ended December 31, 2025, were $2,144,000, a decrease of $663,000, or 24%, compared to cost of revenues of $2,807,000

for the year ended December 31, 2024.

change was due both to an increase in revenues and to an increase in cost of revenues, as described above.

decrease in cost of revenues is consistent with the decrease in revenues, as described above.

profit for the year ended December 31, 2025 was $871,000, a decrease of $286,000, or 25%, compared to a gross profit of $1,157,000 for

the year ended December 31, 2024.

decrease in gross profit was due to the decrease in revenues partially offset by the decrease in cost of revenues, as described above.

and Development Expenses

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for the year ended December 31, 2024.

The increase in

research and development expenses was mainly due to the development of new products and the resulting increase in payroll and

related expenses for new employee recruitment, an increase in stock-based compensation from new option grants and procuring materials

and services of subcontractors for Industry 4.0 projects.

expect that our research and development expenses will increase as we continue to develop our products and services and recruit additional

research and development employees due to increased focus on R&D activities in the domain of I4.0.

increase in research and development expenses was mainly due to the development of new products and the increase in payroll

and related expenses related to the recruitment of new employees, an increase in stock-based compensation from new option grants and

procuring materials and services of subcontractors for Industry 4.0 projects.

expect our research and development expenses may modestly grow as we continue to develop our products and services and recruit

additional experts to support our focus on Industry 4.0 solutions.

and Marketing Expenses

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for the year ended December 31, 2024.

increase was mainly due to an increase in payroll and related expenses for new employee recruitment and an increase in stock-based compensation,

partially offset by one-time expenses incurred during the year ended December 31, 2023 related to rebranding activities.

expect that our sales and marketing expenses will increase as we expand our selling and marketing efforts in the I4.0 domain.

increase in sales and marketing expenses was primarily driven by our enhanced global selling and marketing activity, including

efforts to penetrate new territories and market verticals and enhance product visibility.

This led to higher expenses associated

with the recruitment of new workforce and marketing

expect that our sales and marketing expenses will increase as we expand our global selling and marketing efforts.

and Administrative Expenses

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for the year ended December 31, 2024.

increase was primarily due to:

increase in professional services expenses including financial consultant, IR consultant, HR consultant and the appointment

of new directors;

increase in payroll and related expenses due to the recruitment of a new CFO and cash compensation bonuses paid to senior executives;

increase/decrease was primarily due to:

increase in payroll and related expenses due to the recruitment of new employees, including a CFO, and cash compensation bonuses

paid to senior executives;

related to our fundraising and uplisting to Nasdaq;

increase in stock-based compensation from new option grants.

incurred an operating loss of $12,507,000 for the year ended December 31, 2024, an increase of $1,874,000, or 18%, compared to

operating loss of $10,633,000 for the year ended December 31, 2023.

The increase in operating loss was due to increases in research

and development expenses, general and administrative expenses and sales and marketing expense, each as described above, partially

offset by an increase in gross profit.

represents booked orders based on purchase orders or hard commitments but not yet recognized as revenue.

incurred operating loss of $18,135,000 for the year ended December 31, 2025, an increase of $5,628,000, or 45%, compared to operating

loss of $12,507,000 for the year ended December 31, 2024.

increase in operating loss was due to increases in research and development expenses, general and administrative expenses and sales and

marketing expenses, each as described above.

Key Business Metrics and

Non-GAAP Financial Measures

monitor the key business metric set forth below to help us evaluate growth trends, establish budgets, measure the effectiveness of our

sales and marketing efforts and assess operational efficiencies.

Our key business metric is backlog.

Increases or decreases in our key

performance metric may not correspond with increases or decreases in our revenue.

is a key business metric that we define as booked orders based on purchase orders or hard commitments but not yet recognized as revenue.

Orders included in backlog may

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customer’s industry, may cause customers to cancel, reduce or delay orders that were previously made or anticipated.

We cannot assure

the timely replacement of cancelled, delayed or reduced orders.

Backlog is presented for supplemental informational purposes only and is

not intended to be a substitute for any GAAP financial measures, including revenue or net income (loss), and, as calculated, may not be

comparable to companies in other industries or within the same industry with similarly titled measures of performance.

In addition, backlog

should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Therefore, backlog

should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.

Backlog as of December 31, 2024 was approximately $15 million compared

to approximately $2.6 million as of December 31, 2023.

assure the timely replacement of cancelled, delayed or reduced orders.

Backlog is presented for supplemental informational purposes only

and is not intended to be a substitute for any GAAP financial measures, including revenue or net income (loss), and, as calculated, may

not be comparable to companies in other industries or within the same industry with similarly titled measures of performance.

backlog should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

backlog should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.

as of December 31, 2025 was approximately $13.8 million compared to approximately $15 million as of December 31, 2024.

and Capital Resources

of December 31, 2024, we had cash, cash equivalents and restricted deposit of $18.5 million compared to cash and cash equivalents and

short-term deposits of $17 million as of December 31, 2023.

In addition, as of December 31, 2024, we incurred an accumulated deficit

of approximately $46 million, as compared to $34.2 million as of December 31, 2023.

In February 2025, we closed a public offering, including the exercise of

an over-allotment option granted to the underwriter in the public offering, at a price

of $6.50 per share.

of December 31, 2025, we had cash, cash equivalents and restricted cash of $26 million, compared to cash and cash equivalents and restricted

deposits of $18.5 million as of December 31, 2024.

In addition, as of December 31, 2025, we incurred an accumulated deficit of approximately

$63 million, as compared to $46 million as of December 31, 2024.

February 2025, we closed a public offering, including the exercise of an over-allotment option granted to the underwriter in the public

offering, at a price of $6.50 per share.

In the aggregate, we issued 3,653,124 shares of common stock, generating gross proceeds of approximately

$23.7 million, prior to the deduction of underwriting discounts, commissions and estimated offering expenses.

primary sources of liquidity to date have been from fund-raising, revenues of customers and warrant exercises.

primary sources of liquidity to date have been from fundraising, revenues from customers and warrant exercises.

Cash Requirements

plan to continue to invest in long-term growth, and therefore we expect that our expenses will grow.

We currently believe that our existing

cash and cash equivalents and short-term deposits will allow us to fund our operating plan through at least the next 12 months from the

date of this Annual Report.

We expect our expenses will increase in connection with our ongoing activities, particularly as we continue

the research and development and the scale up Odysight solutions .

We expect to incur significant

commercialization expenses related to product sales, marketing, manufacturing, and distribution.

Furthermore, we will continue to incur

additional costs associated with operating as a public company.

Accordingly, we may need to raise additional capital before we become

profitable from sales of our solutions and may do so to expand our business, pursue strategic investments, take advantage of financing

opportunities or for other reasons.

We may raise these funds through equity financing, debt financing, or other sources, which may result

in further dilution in the equity ownership of our common stock.

There is no assurance that we will be able to maintain operations at

a level sufficient for investors to obtain a return on their investment in our common stock, or that we will be able to raise sufficient

capital required to implement our business plan on acceptable terms, if at all.

Even if we are successful in raising sufficient capital

to implement our business plan, we will, most likely, continue to be unprofitable for the foreseeable future.

If we are unable to raise

capital when needed or on attractive terms, we would be forced to delay, reduce, or eliminate our research and development programs or

future commercialization efforts.

plan to continue to invest in long-term growth, and therefore we expect that our expenses will continue to grow.

believe that our existing cash and cash equivalents and short-term deposits will allow us to fund our operating plan through the at

least the next 12 months from the date of this Annual Report.

Our expenses may increase in connection with our ongoing activities,

particularly as we continue our commercialization efforts, research and development and the scale up of our solutions .

We expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.

Furthermore, we will continue to incur additional costs associated with operating as a public company.

Accordingly, we may need to

raise additional capital before we become profitable from sales of our solutions and may do so to expand our business, pursue

strategic investments, take advantage of financing opportunities or for other reasons.

We may raise these funds through equity

financing, debt financing or other sources, which may result in further dilution in the equity ownership of our common stock.

is no assurance that we will be able to maintain operations at a level sufficient for investors to obtain a return on their

investment in our common stock, or that we will be able to raise sufficient capital required to implement our business plan on

acceptable terms, if at all.

Even if we are successful in raising sufficient capital to implement our business plan, we will, most

likely, continue to be unprofitable for the foreseeable future.

If we are unable to raise capital when needed or on attractive

terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization

primary uses of cash from operating activities have been for headcount-related expenditures, research and development costs, manufacturing

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(13,703,000 )

Cash provided by (used in) Investing Activities

Cash provided by Investing Activities

Cash provided by Financing Activities

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the year ended December 31, 2024, cash used in operating activities was $8.2 million, consisting of net loss of $11.8 million, partially

offset by a non-cash benefit of $1.8 million and an unfavorable net change in operating assets and liabilities of $2.4 million.

offset by a non-cash benefit of $2.4 million and a favorable net change in operating assets and liabilities of $1.2 million.

benefit consisted primarily of non-cash charges of $2.4 million for stock-based compensation.

The unfavorable net change in our operating

assets and liabilities was primarily due to an increase in accounts receivable of $1.3 million and decrease in contract liabilities of

$1.3 million.

The favorable net change in our operating

assets and liabilities was primarily due to decrease in accounts receivable and decrease in fulfillment asset partially offset by decrease

in contract liabilities.

the year ended December 31, 2025, cash provided by investing activities was $0.3 million, consisting mainly of withdrawal of short terms

deposits, net.

the year ended December 31, 2023, cash used in investing activities was $5.1 million, consisting mainly of investment of short-term deposits,

the year ended December 31, 2024, cash provided by financing activities was $9.8 million, consisting of cash proceeds from issuance

of shares in a private placement, net of issuance costs.

the year ended December 31, 2023, cash provided by financing activities was $13.8 million, consisting of cash proceeds from issuance

of shares and warrants in a private placement, net of issuance costs.

Contractual Obligations

and Commitments

Operating lease

payments represent our commitment for future rent made leases for our offices in Israel and for vehicle leasing.

the year ended December 31, 2024, cash provided by investing activities was $7.6 million, consisting mainly of withdrawal of short terms

deposits, net.

the year ended December 31, 2025, net cash provided by financing activities was $21.1 million, consisting of cash proceeds from

issuance of shares in a private placement, net of issuance costs and proceeds from options exercise.

the year ended December 31, 2024, cash provided by financing activities was $9.8 million, consisting of cash proceeds from issuance of

shares in a private placement, net of issuance costs.

Obligations and Commitments

lease payments represent our commitment for future rent made leases for our offices in Israel and for vehicle leasing.

The total future

payments for our operating lease obligation as of December 31, 2025 were approximately $770 million.

For additional details

regarding our lease, see Note 10 to our consolidated financial statements for the year ended December 31, 2024 included in this

Annual Report on Form 10-K.

did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC

For additional details regarding

our lease, see Note 10 to our consolidated financial statements for the year ended December 31, 2025 included in this Annual Report on

Our lease for proximately 800 square meters of office, manufacturing and

laboratory space in Omer, Israel is set to expire in May 2026, at which time we have leased an alternative location in Omer consisting

of approximately 286 square meters of space.

did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

quantitative and qualitative disclosures about market risk

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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 7. Management’s Discussion and Analysis