What changed in this filing

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Item 9A. Controls and Procedures

2026-03-19 compared with 2025-03-26 · 963 added, 840 removed, 1238 unchanged (59% of the section changed)

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

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

the SEC’s rules and forms.

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

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

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

to allow timely decisions regarding required disclosure.

reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported

within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation,

controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange

Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, or persons performing

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

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

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assessed the effectiveness of our internal control over financial reporting on December 31, 2025.

In making this assessment,

management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework, in

Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or

Based on that assessment under those criteria, management has determined that, as of December 31, 2024, our

internal control over financial reporting was effective.

In making this assessment, management

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

Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO.

Based on that assessment under those

criteria, management has determined that, as of December 31, 2025, our internal control over financial reporting was effective.

Independent Report of the Registered Public Accounting Firm

annual report on Form 10-K does not include an attestation report of our independent registered public accounting firm

regarding internal control over financial reporting.

Management’s report was not subject to attestation by our

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

annual report on Form 10-K.

annual report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal

control over financial reporting.

Management’s report was not subject to attestation by our registered public accounting firm pursuant

to rules of the SEC that permit the Company to provide only management’s report in this annual report on Form 10-K.

in Internal Control over Financial Reporting

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Other information

the quarter ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement”

or a “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408 of Regulation S-K).

the quarter ended December 31, 2025, no director or officer of the Company adopted or terminated a

“Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (in each case, as defined in

Item 408 of Regulation S-K).

use our website (www.odysight.ai) as a channel of distribution for Company information.

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Financial Officer

Technology Officer

VP of Product Portfolio

Business Officer

Benad Goldwasser (5)

4 unchanged sentences

Nimrodi (2)(4)(5)

Carlo Papa (4)

of our audit committee

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of our nominating and corporate governance committee

of our executive committee

director under the rules of Nasdaq

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Ofer served as a colonel (now retired) in the Israeli Air

Force, or the “IAF”, commanding two operational squadrons before commanding “Wing 15”, the optic and electronic

intelligence wing of the IAF.

Force, or the IAF, commanding two operational squadrons before commanding “Wing 15”, the optic and electronic intelligence

wing of the IAF.

In his last position, Mr.

Ofer served as Israel Defense Attaché to Italy, Greece, Serbia, and Croatia,

where he oversaw the largest ever government-to-government transaction between Israel and Italy.

Upon his retirement from the Israel

Defense Forces in 2013, Mr.

Ofer served as Israel Defense Attaché to Italy, Greece, Serbia, and Croatia, where

he oversaw the largest ever government-to-government transaction between Israel and Italy.

Upon his retirement from the Israel Defense

Forces in 2013, Mr.

Ofer joined Elbit Systems Ltd.

in its electro-optics unit as a technology development and program manager

in airborne optic and laser solutions.

Ofer also managed Elbit System’s aerospace division as VP of large-scale development

programs and VP of the Brazil business unit.

in its electro-optics unit as a technology development and program manager in airborne

optic and laser solutions.

Ofer also managed Elbit System’s aerospace division as VP of large-scale development programs and

VP of the Brazil business unit.

Before leaving Elbit Systems, in October 2022, to become our CEO, Mr.

Ofer served as VP

of Global Business Development, Marketing and Sales for Elbit Systems, a position he held since 2020.

Ofer holds an MBA degree from

the University of Haifa, a Bachelor of Economics and Logistics degree (cum laude) from Bar Ilan University in Tel Aviv, and a degree

from the National Security College in Tel Aviv.

Ofer has served as a member of the board of directors of Aerospace Industrial Scan

since August 2024, Robotican Ltd since September 2024 and of the International Board of the Weizmann Institute since November 2023.

Ofer served as VP of Global Business

Development, Marketing and Sales for Elbit Systems, a position he held since 2020.

Ofer holds an MBA degree from the University of

Haifa, a Bachelor of Economics and Logistics degree (cum laude) from Bar Ilan University in Tel Aviv, and a degree from the National

Security College in Tel Aviv.

Ofer has served as a member of the board of directors of Aerospace Industrial Scan Ltd.

2024, Robotican Ltd since September 2024 and of the International Board of the Weizmann Institute since November 2023.

Brenner has served as our Chief Financial Officer since May 2024.

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In this capacity, Ms.

Brenner supported the establishment of global company activities,

including strategic decision making and significant commercial agreements, building financial and operational teams and infrastructure,

and handling fund raising and investor relations.

Brenner supported the establishment of global company activities, including strategic

decision making and significant commercial agreements, building financial and operational teams and infrastructure, and handling fund

raising and investor relations.

From July 2017 to May 2022, Ms.

Brenner served as Executive Director of Finance at

RedHill Biopharma Ltd.

RDHL), where she facilitated fund raising activities, managed complex transactions and legal aspects,

and was responsible for Securities and Exchange Commission filings and financial reporting.

Brenner served as Executive Director of Finance at RedHill Biopharma

RDHL), where she facilitated fund raising activities, managed complex transactions and legal aspects, and was responsible

for SEC filings and financial reporting.

Prior to this, Ms.

Brenner served in various

financial positions at Vizrt Inc., Viola Ventures and PricewaterhouseCoopers.

Brenner is a CPA (Israel), holds a Bachelor of Accounting,

Economics and Business Administration, and an MBA in Financial Management, both from Tel Aviv University.

has served as our Senior VP of Product Portfolio since November 2022.

Avinu has more than 15 years of experience in development,

operations, and leadership in a variety of industries, including aviation and aerospace.

He joined Odysight.ai from Elbit Systems, where

since 2018 he led the advanced capabilities R&D group in helmet-mounted displays and sensors, a key segment within the company’s

aerospace division.

Before joining Elbit Systems, Mr.

Avinu served for six years in the IAF as a computer vision system engineer and

commander of the electronic systems development group.

Avinu holds a Master of Science degree from Ben-Gurion University of the Negev

in Beer-Sheva, Israel with a focus on electro-optical engineering, and a Bachelor of Science degree in electrical engineering from Ort

Braude College of Engineering in Karmiel Israel.

Avinu also studied practical engineering and electronics at the Israeli Air Force

Israeli has served as our Chief Technology Officer since October 2023.

Before joining us, Mr.

Israeli served from January 2022 to

September 2023 as CTO at Gadfin, where he spearheaded the development and execution of Gadfin’s technology strategy.

From December

2019 to February 2022, Mr.

Israeli served as the Senior Vice President of System Engineering, Program Management, and Customer Success

at IAI headquarters.

His career includes a variety of other roles, including Chairman of the consortium of AI Academy–- Artificial

Intelligence Training;

Director of Program Management, Ground-Based & Missiles Defense Systems at IAI;

Director of System Engineer

and Product Management, Civil Aircraft Protection Systems at the Israel Ministry of Defense – DDR&D;

Senior Systems Engineer,

Unmanned Aerial Vehicle at the Israeli Air Force;

and Director of R&D and Program Management, MALE Unmanned Aerial System at the

Israeli Ministry of Defense - DDR&D.

Israeli holds an MSc in System Engineering and Program Management from the Technion –

Israel Institute of Technology in Haifa, Israel, and a BSc in electrical engineering and Bachelor of Education from Tel Aviv University.

Brenner served in various financial positions at Vizrt Inc., Viola Ventures

and PricewaterhouseCoopers.

Brenner is a CPA (Israel), holds a Bachelor of Accounting, Economics and Business Administration, and

an MBA in Financial Management, both from Tel Aviv University.

Sagi has served as our Chief Business Officer since November 2025.

Sagi has more than 30 years of executive,

operational, strategic and economic experience across the public, private and defense sectors.

Prior to joining the Company, Mr.

served from October 2023 to October 2025 as VP of Asset Management at Enlight Renewable Energy Ltd.

ENLT), where he was responsible

for hundreds of millions of dollars in annual revenues generated by renewable-energy facilities worldwide.

From November 2021 to January

Sagi served as Deputy General Manager at the Israeli Ministry of Transportation, where he led multi-billion-dollar infrastructure

programs, regulatory reform and national strategic planning in collaboration with governmental and industrial stakeholders.

Sagi served from January 2020 as General Manager and Director of Eyeviation, a neuroscience-focused startup, and from December

2018 as CEO and Director of Plus S.A., a business consulting company.

Earlier in his career, Mr.

Sagi served as Head of the Budget Department

for the Israeli Air Force, achieving the rank of colonel, where he managed multi-billion-dollar procurement and budgeting processes with

major defense contractors in Israel and abroad.

Sagi holds a B.A.

in Economics and Psychology from Bar-Ilan University in Ramat Gan,

Israel, and an E.M.B.A.

in Diplomacy and Security Studies from Tel Aviv University.

Benad Goldwasser has served as chairman of our board of directors since December 2019, and has served as chairman of Odysight.ai

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Goldwasser is a serial entrepreneur and retired urology medical doctor.

In 2016, Prof.

Goldwasser helped launch a venture capital fund together with SAIL, a Shanghai Government investment company.

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

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

From January 2021 to January 2025, Prof.

Goldwasser served as Chairman of the Board of Directors of Inspira Technologies Ltd (Nasdaq:

served as Chairman of the Board of Directors of Inspira Technologies Ltd (Nasdaq:

From 2013-2016 Prof.

served as an external director of BioCanCell Ltd.

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

Rita Medical Inc., Optonol Ltd.

Goldwasser served as an

external director of BioCanCell Ltd.

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

and GI View Ltd.

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

Israeli Venture Capital firm.

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

Professor of Surgery at Tel-Aviv University.

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

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

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

Jackson Medeiros de Farias

Schneider has served on our board of directors since December 2023.

Schneider is currently an Adjunct Professor Senior at

Columbia University in New York.

Schneider is currently an Adjunct Professor Senior at Columbia

University in New York.

From January 2014 to November 2022, Mr.

Schneider served as President and CEO of Embraer Defense

& Security, a leading Latin American aerospace and defense company and, from August 2020 to August 2022, he served as a visiting

senior research fellow (non-resident) in the Department of War Studies at King’s College in London.

Schneider served as President and CEO of Embraer Defense & Security,

a leading Latin American aerospace and defense company and, from August 2020 to August 2022, he served as a visiting senior research fellow

(non-resident) in the Department of War Studies at King’s College in London.

Before this, Mr.

served in other capacities for Embraer and in a series of senior management positions for Mercedes-Benz Do Brasil LTDA,

Daimler-Chrysler (Mercedes-Benz), and Unilever do Brasil.

Schneider also served on the board of directors of Tempest S.A.,

Visiona Tecnologia Aerospacial S.A., and OGMA, the Portugal Aerospace Industry, each affiliated with Embraer, until April 2023.

currently serves on the advisory board or board of directors of Sonda Tecnologias (Brazil), Abra Aviation Group (London), CBMM

(Brazil) and Mercedes-Benz Do Brasil.

Schneider served in other capacities

for Embraer and in a series of senior management positions for Mercedes-Benz Do Brasil LTDA, Daimler-Chrysler (Mercedes-Benz), and Unilever

Schneider also served on the board of directors of Tempest S.A., Visiona Tecnologia Aerospacial S.A., and OGMA, the Portugal

Aerospace Industry, each affiliated with Embraer, until April 2023 and on the board of directors of Mercedes-Benz Do Brasil until December

He currently serves on the advisory board or board of directors of Sonda Tecnologias (Brazil), Abra Aviation Group (London), CBMM

(Brazil) and Casas Bahia (Brazil).

In addition, Mr.

Schneider has served in leadership roles in various industry associations and

is currently the President of the Superior Council for Trade and Commerce in the Federation of Industries of the State of Sao Paulo.

He holds a law degree from 1982 to 1986 from UFRGS/UNB and an MBA from the Business School Sao Paulo in Brazil in partnership with

the Rotman School in Toronto, Canada.

Schneider has served in leadership roles in various industry associations,

including as the President of the Superior Council for Trade and Commerce in the Federation of Industries of the State of Sao Paulo until

December 2025.

He holds a law degree from 1982 to 1986 from UFRGS/UNB and an MBA from the Business School Sao Paulo in Brazil in partnership

with the Rotman School in Toronto, Canada.

Rubin has served on our board of directors since December 2023.

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Sol Gel Technologies Ltd.

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

device companies, including Digma Medical, a company developing systems to treat insulin resistance present in type 2 diabetes and other

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

SLGL) since 2014 and has served as its interim Chief Executive

Officer since January 1, 2025.

Arkin also sits on the board of directors of several private pharmaceutical and medical device

companies, including Digma Medical, a company developing systems to treat insulin resistance present in type 2 diabetes and other metabolic

syndrome diseases.

From 2005 to 2008, Mr.

Arkin served as the

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

Prior to joining Sol Gel Technologies

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

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

Arkin served as the head of generics at Perrigo Company, and from 2005 until 2011, as a member

of its board of directors.

Prior to joining Sol Gel Technologies Ltd., Mr.

Arkin served as a director of cCAM Biotherapeutics Ltd., a

company focused on the discovery and development of novel immunotherapies to treat cancer from 2012 until its acquisition in 2015 by

Merck & Co., Inc.

Arkin served as chairman of Agis Industries Ltd.

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Arkin holds a B.A.

degree in psychology from the Tel Aviv University,

degree in psychology from the Tel Aviv University, Israel.

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

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

and Space Division of the IAI, a position she has held since April 2020, and Chairwoman of RAKIA, Scientific and Technological Mission

to the International Space Station, a position she has held since April 2021.

Kreiss is currently the Chief of Innovation at the Systems,

Missiles and Space Division of the IAI, a position she has held since April 2020, and Chairwoman of RAKIA, Scientific and

Technological Mission to the International Space Station, a position she has held since April 2021.

Since 2013, Ms.

Kreiss has served as Deputy Director of

the Space Division at IAI, leading the development, construction, launch and operation of observation and communication satellites for

both Israeli and foreign users.

Since January 2025, Ms.

Kreiss is also serving as a member of the board of Phoenix Financial Ltd (TLV:PHOE).

served as Deputy Director of the Space Division at IAI, leading the development, construction, launch and operation of observation

and communication satellites.

Kreiss has served as a member of the board of directors and audit committee of Phoenix

Financial Ltd (TLV:PHOE) since January 2025.

Prior to that, Ms.

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

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

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

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

Massachusetts Institute of Technology.

Kreiss held various leadership positions within IAI, including chief engineer of

Israel’s Arrow 2 anti-ballistic missile defense system from 2000 to 2006, and project manager of the Arrow 3 exo-atmospheric

interceptor from 2007 to 2013.

Kreiss holds a B.Sc degree in chemical engineering from the Technion, Israeli Institute of

Technology, an Executive Masters in Business Administration degree from Tel Aviv University, and completed a visiting research

fellowship at the Aeronautics & Astronautics Department of the Massachusetts Institute of Technology.

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

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the Israeli Telecommunication Corp.

BEZQ) since 2017.

BEZQ) since 2017 and director of Isras Investment

ISRAS) since January 2025 .

Vurembrand also served as chairman of the board of Lageen Ltd.

from 2019 until December 2023.

from 2019 until

December 2023.

From 2013 until 2019, Mr.

Vurembrand was the Chief Executive Officer of Kupat Holim Meuhedet, Israel’s

third largest health care organization.

From 2008 until 2013, he was the Chief Executive Officer of Alon Holding Blue Square –

Israel Ltd., and prior to that, from 2007 until 2008, he was the Chief Executive Officer of Phoenix Investments and Finance Ltd.

in his career, from 2002 until 2007, Mr.

Vurembrand was the Chief Executive Officer of Clalit Health Services Group, Israel’s largest

Vurembrand was the Chief Executive Officer of Kupat Holim Meuhedet, Israel’s third largest

health care organization.

From 2008 until 2013, he was the Chief Executive Officer of Alon Holding Blue Square – Israel Ltd., and

prior to that, from 2007 until 2008, he was the Chief Executive Officer of Phoenix Investments and Finance Ltd.

Earlier in his career,

from 2002 until 2007, Mr.

Vurembrand was the Chief Executive Officer of Clalit Health Services Group, Israel’s largest health care

organization.

Vurembrand has served on numerous boards of directors, including Africa Israel Residences LTD.

from 2014 until 2016, Discount Bank (TASE:DSCT) 2006 until 2007, U-Bank from 2005 until 2006, Blue Square Israel (TASE:

BSI) from 2001

until 2006, and Dikla Medical Insurance Ltd.

AFRE) from 2014

until 2016, Discount Bank (TASE:DSCT) 2006 until 2007, U-Bank from 2005 until 2006, Blue Square Israel (TASE:

BSI) from 2001 until 2006,

and Dikla Medical Insurance Ltd.

from 1995 until 2002.

Vurembrand has also served on the board of trustees of Bar Ilan

University since 2019.

Vurembrand holds a B.Sc degree in industrial engineering and management from the Technion, Israeli Institute

of Technology.

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

Vurembrand holds a B.Sc degree in industrial engineering and management from the Technion, Israeli Institute of Technology.

Nimrodi has served on our board of directors since August 2023.

Nimrodi has over 25 years’ experience working in

start-ups and large global businesses in the life sciences, pharmaceutical, and biotechnology industries.

From May 2019 to November

Nimrodi was the chairman and chief executive officer of Accellix Inc., a life sciences company.

From 2014 to April 2019,

Nimrodi was the chief business officer of Intrexon (currently Precigen, Inc.).

Prior to this, he held several executive roles at

Life Technologies Inc.

Nimrodi has over 25 years’ experience working in start-ups

and large global businesses in the life sciences, pharmaceutical, and biotechnology industries.

From May 2019 to November 2024, Mr.

was the chairman and chief executive officer of Accellix Inc., a life sciences company.

From 2014 to April 2019, Mr.

Nimrodi was the

chief business officer of Intrexon (currently Precigen, Inc.).

Prior to this, he held several executive roles at Life Technologies Inc.

(now part of Thermo Fisher), and was chief executive officer at Proneuron Biotechnologies Inc.

and Mindsense

Biosystems Ltd.

In addition, Mr.

Nimrodi currently serves as a member of the board of Evogene Ltd.

EVGN) and at the private

company Scopio Labs.

and Mindsense Biosystems Ltd.

Nimrodi currently serves as chairman of the board of Evogene Ltd.

EVGN) and a member of the board of the private companies

MNDL Bio and Scopio Labs.

From July 2022 to December 2024, Mr.

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Carlo Papa has served on our board of directors since September 2024 and as Chairman of Odysight.ai EU since January 2025.

Papa has served as Chief Economics Advisor at

Berkeley Research Group since January 2025, Senior Fellow at the Columbia Center on Sustainable Investment at Columbia University

since August 2024 and as a member of the Impact Advisory Board of SACE, Italy’s export credit agency, since June 2023.

April 2015 to June 2024, Dr.

Papa served as Managing Director of the Enel Foundation, an Italian think-tank, and as Global Head of

Relationships with academic and research institutions for Enel Group.

Papa previously served as Chief Innovation Officer at Enel

Green Power and has held several positions with the Enel Group, including Chief of Staff of the Chairman’s Office, Head of

Business Development for Russia and Ukraine (Power Generation Division) and co-founder of and Investment Manager for Enel Capital

Corporate Venture Fund.

Papa currently serves on the board, advisory board or executive committee of Italy’s National PhD

in Sustainable Development and Climate Change, the UN’s Council Engineers for Energy Transition and Harambee Africa.

Papa is currently Senior Fellow at the Columbia Center on Sustainable Investment at Columbia University since August 2024.

January 2025 to December 2025, Dr.

Papa served as Chief Economics Advisor at Berkeley Research Group;

from June 2023 to June 2025,

as a member of the Impact Advisory Board of SACE, Italy’s export credit agency;

and from April

2015 to June 2024, as Managing Director of the Enel Foundation 4, an Italian think-tank, and as Global Head of Relationships

with academic and research institutions for Enel Group.

Papa previously served as Chief Innovation Officer at Enel Green Power

and has held several positions with the Enel Group, including Chief of Staff of the Chairman’s Office, Head of Business

Development for Russia and Ukraine (Power Generation Division) and co-founder of and Investment Manager for Enel Capital Corporate

Venture Fund.

Papa currently serves on the board, advisory board or executive committee of Italy’s National PhD in

Sustainable Development and Climate Change, the UN’s Council Engineers for Energy Transition and Harambee Africa.

received a BSc in Economics - MSc in Management and Finance from Palermo University in Italy, an EMBA Trium Global Executive from

London School of Economics, Stern NYU, HEC Paris and a PhD in Management Engineering from Tor Vergata University in Rome.

board of directors is divided into three classes.

board of directors is currently divided into three classes with staggered, three-year terms.

Zeev Vurembrand, Nir Nimrodi and Dr.

Carlo Papa are our Class I directors, with their

terms of office to expire at our 2025 annual meeting of stockholders.

Jackson Schneider, Ronit Rubin and Inbal Kreiss are our Class II

directors, with their terms of office to expire at our 2026 annual meeting of stockholders.

Professor Benad Goldwasser and Moshe (Mori)

Arkin are our Class III directors, with their terms of office to expire at our 2027 annual meeting of stockholders.

At each annual meeting

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

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

have been duly elected and qualified.

Papa are our Class I directors, with their terms of office to expire at our 2028 annual meeting of stockholders.

Jackson Schneider, Ronit

Rubin and Inbal Kreiss are our Class II directors, with their terms of office to expire at our 2026 annual meeting of stockholders.

Benad Goldwasser and Moshe (Mori) Arkin are our Class III directors, with their terms of office to expire at our 2027 annual meeting

of stockholders.

each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election

and qualification until the third annual meeting following election.

Our amended and restated articles of incorporation and bylaws provide

that the authorized number of directors may be changed only by resolution of the board of directors, with such number as provided by

our bylaws being not less than three nor more than ten.

Any additional directorships resulting from an increase in the number of directors

will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors.

division of our board of directors into three classes with staggered three-year terms may delay or prevent a change of our management

or a change in control of our Company.

Our directors may be removed only for cause by the affirmative vote of the holders of a majority

in voting power of the outstanding shares of our capital stock entitled to vote in the election of directors.

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

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board since May 2023.

Section 16(a) Reports

16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than 10% of our outstanding

shares of common stock (collectively, “Reporting Persons”) to file with the SEC initial reports of ownership and reports

of changes in ownership in our common stock and other equity securities.

Such persons are required by SEC regulations to furnish to us

copies of all Section 16(a) forms they file.

Based solely upon a review of Forms 3, 4, and 5 furnished to the Company, the Company believes

that, that during the fiscal year ended December 31, 2025, all filing requirements applicable to the Reporting Persons were timely met

except that Jackson Schneider failed to report one transaction on time on Form 4.

Relationships

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material to an evaluation of the ability of our directors or executive officers.

have adopted a code of business conduct and ethics that applies to all of our directors, officers, and employees (including our principal

executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions).

We have made the code of business conduct and ethics available on our website at www.odysight.ai.

We will disclose promptly by posting

such disclosure on our website any amendment to or waiver from the code of business conduct and ethics for our principal executive officer,

principal financial officer, principal accounting officer or controller, or persons performing similar functions, as required by law

or SEC regulations.

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

have a written code of business conduct and ethics that applies to our directors, officers, and employees, including our principal executive

officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

We have posted

a current copy of the code of business conduct and ethics on our website at www.odysight.ai , in the “Investors” section

under “Corporate Governance.” In addition, we intend to post on our website all disclosures that are required by law or the

rules of Nasdaq concerning any amendments to, or waivers from, any provision of the code of business conduct and ethics.

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

Trading Policy

We adopted an insider

trading policy that governs the purchase, sale and/or other transactions of our securities by our directors, officers and employees that

it believes is reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and listing standards

applicable to us.

A copy of our insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K for the fiscal

year ended December 31, 2024.

In addition, with regard to our trading in its own securities, it is our

policy to comply with the federal securities laws and applicable listing standards.

Board of Directors has adopted an Executive Officer Clawback Policy (the “Clawback Policy”), in accordance with the Nasdaq

listing standards and Exchange Act Rule 10D-1, which applies to our current and former executive officers.

Under the Clawback Policy,

we are required to recoup the amount of any Erroneously Awarded Compensation (as defined in the Clawback Policy) on a pre-tax basis within

adopted an insider trading policy that governs the purchase, sale and/or other transactions of our securities by our directors, officers

and employees (including certain family members) and any entities they control that we believe is reasonably designed to promote compliance

with applicable insider trading laws, rules and regulations, and listing standards applicable to us.

A copy of our insider trading policy

is filed as Exhibit 19.1 to this Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

In addition, with regard to

any trading our own securities, it is our policy to comply with the federal securities laws and applicable exchange listing requirements.

board of directors has adopted an Executive Officer Clawback Policy, or the Clawback Policy, in accordance with the Nasdaq listing

standards and Exchange Act Rule 10D-1, which applies to our current and former executive officers.

Under the Clawback Policy, we are

required to recoup the amount of any Erroneously Awarded Compensation (as defined in the Clawback Policy) on a pre-tax basis within

a specified lookback period in the event of any Accounting Restatement (as defined in the Clawback Policy), subject to limited impracticability

Policies and Practices Related to the Grant of

Certain Equity Awards

Under our insider

trading policy, our board of directors or any committee thereof shall consider our possession of material non-public information in connection

with the timing of each grant of equity under our equity incentive plans, and determine whether a grant of equity should be delayed or

otherwise modified due to the possession of such information at such time.

and Practices Related to the Grant of Certain Equity Awards

our insider trading policy, our board of directors or any committee thereof shall consider our possession of material non-public information

in connection with the timing of each grant of equity under our equity incentive plans, and determine whether a grant of equity should

be delayed or otherwise modified due to the possession of such information at such time.

Leadership Structure and Role in Risk Oversight

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independence of the board of directors.

board of directors has established an audit committee, compensation committee and a nominating and corporate governance committee and

adopted written characters for each of these committees, which are available on our website at www.odysight.ai.

Our board of directors

may establish other committees as it deems necessary or appropriate from time to time.

board of directors has established an executive committee, audit committee, compensation committee and a nominating and corporate governance

committee and adopted written characters for each of these committees, which are available on our website at www.odysight.ai.

of directors may establish other committees as it deems necessary or appropriate from time to time.

members of the executive committee are Nir Nimrodi, Carlo Papa and Jackson Schneider, with Jackson Schneider as its designated chairperson.

The purpose of the executive committee is to advise and consult with management on matters requiring prompt attention between regularly

scheduled board meetings and to assist the board in overseeing the business and affairs of the Company.

members of the audit committee are Ms.

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Vurembrand as its designated chairperson, all

of whom meet the independence criteria established by Nasdaq.

The board of directors has determined that Mr.

Vurembrand qualifies as

an “audit committee financial expert” as defined by SEC rules adopted pursuant to the Exchange Act.

Nasdaq requires that

audit committees have at least three directors and that all directors be independent, as defined in the Nasdaq requirements and Rule

10A-3 under the Exchange Act.

of whom meet the independence criteria under Rule 10A-3 promulgated under the Exchange Act and Nasdaq listing standards, including those

related to audit committee membership.

The members of our audit committee meet the requirements for financial literacy under applicable

Nasdaq listing standards.

In addition, the board of directors has determined that Mr.

Vurembrand qualifies as an “audit committee

financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K promulgated under the Exchange Act, and under the

similar Nasdaq listing requirement that the audit committee have a financially sophisticated member.

Nasdaq listing standards require

that audit committees have at least three directors and that all directors be independent, as defined in Nasdaq listing standards and

audit committee assists the board of directors in its oversight of financial reporting practices and the quality and integrity of our

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Kreiss as its designated chairperson.

all of whom meet the independence criteria established by Nasdaq.

The compensation committee is charged with the responsibility for setting

executive compensation, reviewing certain compensation programs, administering our equity incentive plans, reviewing and discussing with

management the compensation discussion and analysis required in proxy statements (if and when applicable), preparing a report on executive

compensation required by SEC rules to be included in proxy statements (if and when applicable) and making other recommendations to the

board of directors.

Each member of the compensation committee qualifies as an independent director under Nasdaq’s heightened independence standards

for members of a compensation committee and as a “non-employee director” as defined in Rule 16b-3 of the Exchange Act.

compensation committee is charged with the responsibility for setting executive compensation, reviewing certain compensation programs,

administering our equity incentive plans, reviewing and discussing with management the compensation discussion and analysis required

in proxy statements (if and when applicable), preparing a report on executive compensation required by SEC rules to be included in proxy

statements (if and when applicable) and making other recommendations to the board of directors.

compensation committee may delegate its authority under its charter to one or more subcommittees as it deems appropriate from time to

The compensation committee may also delegate to an officer in order to ensure compliance with legal and regulatory obligations,

to ensure timely decision-making or for other purposes, as further described in its charter and subject to the terms of our equity plans.

and Corporate Governance Committee

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Vurembrand as its

designated chairperson, as its designated chairperson, all of whom meet the independence criteria established by Nasdaq.

of the nominating committee is to assist the board of directors in identifying qualified individuals to become directors, help to develop

and implement corporate governance guidelines and monitor board effectiveness.

designated chairperson, all of whom meet the independence criteria established by Nasdaq.

The purpose of the nominating committee is

to assist the board of directors in identifying qualified individuals to serve as directors, help to develop and implement corporate

governance guidelines and monitor board effectiveness.

The nominating and corporate governance committee has the authority to consult

with outside advisors or retain search firms to assist in the search for qualified candidates or consider director candidates recommended

by our stockholders.

audit committee charter, compensation committee charter, nominating and corporate governance committee charter and other corporate governance

information are available under the Corporate Governance section of the Investors page of our website located at www.odysight.ai, or

by writing to our Secretary at our offices at Suite 7A, Industrial Park, P.O.

Box 3030, Omer, Israel 8496500.

by writing to our Secretary at our offices at 12 Abba Hillel Silver RD, Sasson Hugi Tower, Ramat Gan 5250606, Israel.

committee interlocks and insider participation

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Name and Principal Position

Base Salary (4)

Stock Awards (5)

Option Awards (5) (6)

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Chief Financial Officer (2)

Senior VP Product Portfolio (3)

Ofer’s compensation earned in his capacity as the Chief Executive Officer of our wholly-owned subsidiary, Odysight.ai

Ofer did not earn any compensation in his capacity as the Chief Executive Officer of Odysight.ai Inc and any of our other subsidiaries.

Brenner’s compensation earned in her capacity as then Chief Financial Officer of our wholly-owned subsidiary,

Odysight.ai Ltd.

Brenner did not earn any compensation in her capacity as the Chief Financial Officer of Odysight.ai Inc and any of our other subsidiaries.

Senior VP – Head of

Business Unit (3)

Ofer’s compensation earned in his capacity as the Chief Executive Officer of the entire Odysight.ai group, fully paid

by our wholly-owned subsidiary, Odysight.ai Ltd.

Brenner’s compensation earned in her capacity as then Chief Financial Officer of the entire Odysight.ai group, fully

paid by our wholly-owned subsidiary, Odysight.ai Ltd.

Brenner’s employment commenced on May 5,

Avinu’s compensation earned in his capacity as the Senior VP Product Portfolio of our wholly-owned subsidiary,

Odysight.ai Ltd.

Avinu’s compensation earned in his capacity as the Senior VP Product Portfolio until August 1, 2025 and, after that, as

Senior VP – Head of U.S.

Business Unit.

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

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

The 2024 figures

are unaudited numbers.

2025 and 2024, referenced amount is for car lease and other related vehicle expenses.

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(ii) a cash compensation bonus of NIS 60,000 to Einav Brenner, our Chief Financial Officer, and an award to her of 30,000 options to

purchase shares of our common stock and (iii) a cash compensation bonus of NIS 120,000 to Jacob Avinu, our Senior VP of Product Portfolio,

and an award to him of 40,000 options to purchase shares of common stock.

So long as the executive continues as a service provider with us, the options will vest with respect to one-third of the shares of common

stock on the first anniversary of the grant date and, with respect to the balance of the shares of common stock, will vest over two years

in eight equal quarterly installments following the first anniversary of the grant date.

The options are subject to acceleration of vesting

in the event of a change of control.

purchase shares of our common stock and (iii) a cash compensation bonus of NIS 120,000 to Jacob Avinu, our Senior VP – Head of

Business Unit (who was then our Senior VP of Product Portfolio), and an award to him of 40,000 options to purchase shares of common

So long as the executive continues as a service provider with us, the options will vest with respect to one-third of the shares

of common stock on the first anniversary of the grant date and, with respect to the balance of the shares of common stock, will vest

over two years in eight equal quarterly installments following the first anniversary of the grant date.

The options are subject to acceleration

of vesting in the event of a change of control.

March 10, 2025, our b oard of directors, upon recommendation of our

compensation committee, approved the following with regard to Mr.

increase in monthly base salary from NIS 80,000 to NIS 90,000, effective January 1, 2025 , with

such monthly base salary remaining subject to adjustments for inflation as announced from time to time in accordance with

Israeli law , (ii) a cash compensation bonus of $142,500 and (iii) an award of 150,000 options to purchase shares of our

(i) an increase

in monthly base salary from NIS 80,000 to NIS 90,000, effective January 1, 2025 , with such monthly

base salary remaining subject to adjustments for inflation as announced from time to time in accordance with Israeli law , (ii)

a cash compensation bonus of $142,500 and (iii) an award of 150,000 options to purchase shares of our

common stock.

The foregoing options were awarded to Mr.

Ofer pursuant to our 2024 Stock Incentive

Plan and have an exercise price of $6.50 per share.

Ofer pursuant to our 2024

Stock Incentive Plan and have an exercise price of $6.50 per share.

So long as Mr.

Ofer continues as a service provider with us , the

options will vest with respect to one-third of the shares of common stock on the first anniversary of the grant date and, with

respect to the balance of the shares of common stock, will vest over two years in eight equal quarterly installments following the

first anniversary of the grant date.

The options are subject to acceleration of vesting in the event of a change of control of the

On the same date, our board of directors, upon recommendation of the compensation committee, approved a cash

compensation bonus of $95,000 to Ms.

Ofer continues as a service provider with us ,

the options will vest with respect to one-third of the shares of common stock on the first anniversary of the grant date and, with respect

to the balance of the shares of common stock, will vest over two years in eight equal quarterly installments following the first anniversary

of the grant date.

The options are subject to acceleration of vesting in the event of a change of control of the Company.

date, our board of directors, upon recommendation of the compensation committee, approved

a cash compensation bonus of $95,000 to Ms.

or through our wholly-owned subsidiary, Odysight.ai Ltd., have entered into written employment agreements with each of our executive

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Ofer as our Chief Executive Officer, we entered into an employment agreement with Mr.

The agreement provides for a monthly base salary of NIS 70,000, subject to adjustments for inflation as announced from time to time

in accordance with Israeli law.

agreement provides for a monthly base salary of NIS 70,000, subject to adjustments for inflation as announced from time to time in accordance

with Israeli law.

The agreement also provides that Mr.

Ofer is entitled to receive an equity grant of options to

purchase a total of 300,000 shares of our common stock, par value $0.001 per share, at an exercise price of $4.50 per share, which

shall vest and become exercisable as follows:

Ofer is entitled to receive an equity grant of options to purchase a total of

300,000 shares of our common stock, par value $0.001 per share, at an exercise price of $4.50 per share, which shall vest and become

exercisable as follows:

33.33% of the shares covered by Mr.

Ofer’s options on the first anniversary of

his service as CEO, and 8.33% of the shares covered by Mr.

Ofer’s options at the end of each subsequent three-month period

thereafter over the course of the subsequent two years.

Ofer’s options on the first anniversary of his service as CEO, and

8.33% of the shares covered by Mr.

Ofer’s options at the end of each subsequent three-month period thereafter over the course of

the subsequent two years.

Furthermore, Mr.

Ofer’s options will immediately vest upon the

occurrence of the following (i) the sale of all or substantially all of the assets of the Company, (ii) the sale of more than 50% of

our common stock in a non-public sale, (iii) the dissolution or liquidation of the Company or (iv) any merger, share exchange,

consolidation or other reorganization or business combination if immediately after such transaction either (A) the persons who were

our directors immediately prior to such transaction do not constitute at least a majority of the directors of the surviving entity

or (B) the persons who hold a majority of the voting capital stock of the surviving entity are not the persons who held a majority

of the voting capital stock of the Company immediately prior to such transaction.

Ofer’s options will immediately vest upon the occurrence of the following (i) the sale

of all or substantially all of the assets of the Company, (ii) the sale of more than 50% of our common stock in a non-public sale, (iii)

the dissolution or liquidation of the Company or (iv) any merger, share exchange, consolidation or other reorganization or business combination

if immediately after such transaction either (A) the persons who were our directors immediately prior to such transaction do not constitute

at least a majority of the directors of the surviving entity or (B) the persons who hold a majority of the voting capital stock of the

surviving entity are not the persons who held a majority of the voting capital stock of the Company immediately prior to such transaction.

Additionally, we agreed to pay Mr.

Ofer both (i) a

signing bonus in the aggregate amount of NIS 70,000 and (ii) an annual bonus pursuant to certain pre-determined measurable

objectives agreed to with Mr.

Ofer and approved by the board of directors by January 31 with respect to each calendar year, with the

Company agreeing to recommend to the board of directors a grant of restricted stock in lieu of Mr.

Ofer’s bonus through such

time we are profitable and subject to meeting applicable objectives.

Ofer both (i) a signing bonus in the aggregate amount of NIS 70,000 and (ii) an annual bonus pursuant

to certain pre-determined measurable objectives agreed to with Mr.

Ofer and approved by the board of directors by January 31 with respect

to each calendar year, with the Company agreeing to recommend to the board of directors a grant of restricted stock in lieu of Mr.

bonus through such time we are profitable and subject to meeting applicable objectives.

In accordance with the terms of Mr.

Ofer’s employment

agreement, he will also receive additional benefits customary for an executive officer of his experience and for companies of

similar stature and standing to that of us.

employment agreement, he will also receive additional benefits customary for an executive officer of his experience and for companies

of similar stature and standing to that of us.

Effective January 1, 2025, Mr.

Ofer’s monthly base salary was NIS 90,000.

December 4, 2025, our board of directors approved and we entered into an amendment to the employment agreement with Mr.

to the amendment, effective with the salary for November 2025, Mr.

Ofer’s gross monthly base salary increased to NIS 99,000.

amendment also revises Mr.

Ofer’s incentive and termination provisions.

Beginning with the 2026 calendar year, subject to the achievement

of board-approved performance targets, Mr.

Ofer is eligible for an annual bonus of up to five monthly salaries and a special discretionary

bonus of $200,000 for exceptional accomplishments.

Additionally, commencing in 2026, we agreed that we will recommend an annual grant

of options to purchase not less than 50,000 shares of common stock, subject to meeting annual targets, with the exercise price and vesting

schedule to be determined by the board of directors.

In the event Mr.

Ofer’s employment is terminated by us (except in the circumstances

detailed in his original employment agreement) or he resigns for Good Reason (as defined in the amendment), he is entitled to an “adjustment

period” payment equal to six monthly salaries, subject to the execution of a release;

provided, however, that if we achieve our

targets for 2026, this payment shall increase to nine monthly salaries.

Other than as amended, the terms and benefits of Mr.

original employment agreement remain unchanged and in full force and effect.

connection with the appointment of Einav Brenner as our Chief Financial Officer, we entered into an employment agreement with Ms.

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additional benefits customary for an executive officer of her experience and for companies of similar stature and standing to that of

connection with the appointment of Mr.

Avinu as our Senior VP Product Portfolio, we entered into an employment agreement with Mr.

agreement provides for a monthly salary of NIS 60,000.

The agreement also provides that Mr.

Avinu is entitled to receive an equity

grant of options to purchase a total of 100,000 shares of our common stock, par value $0.001 per share, at an exercise price of

$4.50 per share, which shall vest and become exercisable as follows:

33.33% of the shares covered by Mr.

Avinu’s options on

the first anniversary of his service as SVP Product, and 8.33% of the shares covered by Mr.

Avinu’s options at the end of each

subsequent three-month period thereafter over the course of the subsequent two years.

Additionally, the agreement provides to Mr.

(i) a signing bonus in the aggregate amount of NIS 50,000 (ii) a performance bonus in the aggregate amount of NIS 120,000

pursuant to certain objectives and (iii) we will consider, at our sole discretion, after the first and second years following his

employment, granting Mr.

Avinu additional options / RSUs pursuant to certain objectives, subject to the approval of such grant by

the CEO and our board of directors.

In accordance with the terms of Mr.

Avinu’s employment agreement, he will also receive

additional benefits customary for an executive officer of his experience and for companies of similar stature and standing to that

of the Company.

In October 2024, the Board of Directors approved a salary increase for Mr.

Avinu in the amount of NIS 3,000 per

On July 23, 2025, our board of

directors approved the appointment of Mr.

Avinu as the Company’s Senior VP – Head of U.S.

Business Unit.

who served as the Company’s Senior VP of Product Portfolio since November 2022, began his new position on August 1, 2025.

In connection

with his appointment as Senior VP – Head of U.S.

Business Unit, the Company entered into an employment agreement with Mr.

July 23, 2025 that provides for an annual base salary of $298,000.

The employment agreement also provides that Mr.

be entitled to receive an annual special performance bonus of up to 30% of his base salary, subject to achievement of annual personal

objectives and to Company performance, in each case subject to the sole discretion of the Company’s CEO and approval by the board

of directors.

Under the employment agreement, Mr.

Avinu may also be eligible for a one-time special performance option grant,

the amount to be determined by the CEO based on achievement of annual personal objectives and Company performance and subject to approval

by the board of directors.

The employment agreement further provides that Mr.

Avinu is entitled to a one-time relocation allowance

and one-time special salary payment, in addition to reimbursement of certain specific expenses related to his relocation to the U.S.

accordance with the terms of the employment agreement, Mr.

Avinu will also receive additional benefits customary for an executive

officer of his experience and for companies of similar stature and standing to that of the Company.

Equity Awards

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Options Award

Incentive Plan Awards:

Name and Position

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of Securities Underlying Unexercised Options (#) Unexercisable

Equity Incentive Plan Awards:

Incentive Plan Awards:

Number of Securities Underlying Unexercised Unearned Options (#)

Option Exercise Price ($)

Exercise Price ($)

Vesting Schedule

Option Expiration Date

Number of Units of Stock That Have Not Vested (#)

Market Value of Units of Stock That Have Not Vested ($)

Equity Incentive Plan Awards:

Number of Unearned Shares, Units or Other Rights That

Have Not Vested

of Units of Stock That Have Not Vested (#)

Value of Units of Stock That Have Not Vested ($)

Number of Unearned Shares, Units or Other Rights That Have Not Vested

November 14, 2029

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September 16, 2031

March 10, 2032

Einav Brenner,

3 unchanged sentences

November 14, 2029

Senior VP Product Portfolio

Senior VP – Head of U.S.

Business Unit

September 16, 2031

17 unchanged sentences

Benad Goldwasser

Carlo Papa (1)

Moshe (Mori) Arkin

1 unchanged sentence

Jackson Schneider

as a director of Odysight.ai Inc.

since September 16, 2024.

Includes compensation earned as Chairman of Odysight.ai EU.

bonus of $130 thousands

compensation earned as Chairman of Odysight.ai EU.

amount shown in the “Stock Awards” and “Option Awards” columns represents the aggregate grant date fair value

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other terms and limitations as provided in the consulting agreement.

On March 15, 2020, our board of directors approved a quarterly fee of $4,000

payable to each of our currently serving directors, excluding Prof.

On each of April 9, 2021 and August 12, 2021, our board

of directors approved the same terms for directors appointed subsequent to March 15, 2020.

On May 15, 2022, the board of directors approved

a quarterly fee in the amount of $2,000 payable to a director for each committee on which such director serves, if any, with such fee

in addition to any other fees to which such director is entitled as a member of the board of directors or any other committee.

November 22, 2023, our board of directors approved a separate compensation arrangement with Mr.

Schneider, subject to his election

as a director, which took place on December 6, 2023.

In light of the special role and contributions that Mr.

Schneider is expected to

make to the operation of the Company, the board of directors approved compensation that includes an annual fee of $80,000, which will

be paid on a monthly basis in equal installments, and a recommendation to the board of directors to grant Mr.

Schneider options to purchase

a total of 50,000 shares of common stock at an exercise price per share equal to $3.00 per share, vesting over a period of three years

and such other terms as provided in a Director Service Agreement signed between Mr.

Schneider and the Company.

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

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

subsequent to March 15, 2020.

On September 19, 2025, our board of directors approved a quarterly fee in the amount of $2,000 payable

to each current and future director as a member of the audit committee, compensation committee, and executive committee for his/her service

on each such committee, which amount shall be in addition to any other fees to which such member is entitled to receive as a member of

the board or any other committee.

This arrangement does not apply to any current or future member of a board committee who is compensated

pursuant to a separate service agreement with the Company, and each such member shall not be eligible to receive additional compensation

for service on board committees.

September 16, 2024, we entered into a director appointment and services agreement with Dr.

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event of a change of control of the Company.

18, 2025, Odysight.ai EU entered into a two-year agreement with Dr.

Papa, who will serve as Odysight.ai EU’s president and legal

representative, effective as of January 9, 2025.

February 18, 2025, Odysight.ai EU entered into two-year agreement with Dr.

Papa, who will serve as Odysight.ai EU’s president and

legal representative, effective as of January 9, 2025.

Pursuant to the agreement, Dr.

Papa will receive:

(i) an annual fee of €120,000

for such service, to be paid in equal monthly installments, (ii) a signing bonus of €20,000, (iii) an entry bonus equal to an amount

of €40,000 reflecting Dr.

Papa’s prior effort and support in the development of the Italian subsidiary and (iv) such other

insurance, termination fees and other benefits as provided in the agreement.

2025, our board of directors, upon recommendation of our

compensation committee, approved a one-time cash compensation bonus of $130,000 to Prof.

From time to time our directors, including those with separate compensation

arrangements with the Company as described above, receive periodic grants of equity securities for their service as directors.

(i) an annual

fee of €120,000 for such service, to be paid in equal monthly installments, (ii) a signing bonus of €20,000, (iii) an entry

bonus equal to an amount of €40,000 reflecting Dr.

Papa’s prior effort and support in the development of the Italian subsidiary

and (iv) such other insurance, termination fees and other benefits as provided in the agreement.

July 1, 2025, following termination of the February 18, 2025 agreement with Dr.

Papa, Odysight.ai Inc.

entered into a two-year agreement

Papa, who will continue to serve as Odysight.ai EU’s president and legal representative.

Pursuant to the agreement, Dr.

Papa will continue to receive:

(i) an annual fee of €120,000 for such service, to be paid in equal monthly installments and (ii)

such other insurance, termination fees and other benefits as provided in the agreement.

March 10, 2025, our board of directors, upon recommendation of our compensation committee,

approved a one-time cash compensation bonus of $130,000 to Prof.

August 13, 2025, we entered into a revised Director Appointment and Service Agreement with Jackson Schneider.

Under the revised agreement,

Schneider’s annual fee for service on the board of directors will increase from $80,000 to $120,000, which will be paid on

a monthly basis in equal installments, and the Company will recommend that the board of directors grant Mr.

Schneider options to purchase

a total of 50,000 shares of common stock, at an exercise price per share that will be determined at the sole discretion of the board

and shall be subject to provisions of the applicable equity incentive plan under which the options are granted, and vesting over a period

of three years.

In addition, the revised agreement provides that Mr.

Schneider will receive a one-time commission for initiating or facilitating

new commercial agreements between the Company and certain pre-approved third parties (“Eligible Customers”), such as major

The commission is based on actual net revenue generated from these new agreements (“Qualifying Transactions”) and is

structured as follows:

2% commission on net revenue up to $250 million, 1.5% commission on net revenue between $250 million and $400

million, and 1% commission on net revenue exceeding $400 million.

The list of Eligible Customers is to be mutually agreed upon and updated

quarterly in writing.

Commissions are paid within 30 days after the Company receives the applicable net revenue, which is defined as

actual revenue received and recognized by the Company, less third-party costs, applicable taxes and any conditional payments until such

conditions are satisfied.

No commission is payable if a Qualifying Transaction is cancelled, and any previously paid commission must

“Qualifying Transactions” are defined as new (not follow-on) commercial agreements for Company products, resulting

solely from Mr.

Schneider’ efforts.

February 19, 2026, our board of directors approved a three-year extension of the expiration dates of 407,034 outstanding options

previously granted to employees, directors and service providers that were scheduled to expire in 2027.

These options will now

expire in 2030.

This extension included 318,207 options held by Prof.

All other terms and conditions of the options

remain unchanged.

time to time our directors, including those with separate compensation arrangements with the Company as described above, receive periodic

grants of equity securities for their service as directors.

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

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Unless otherwise indicated below, the address for each beneficial owner listed in the table below

is c/o Odysight.ai Inc., Suite 7A, Industrial Park, P.O.

Box 3030, Omer, Israel 8496500.

is c/o Odysight.ai Inc., 12 Abba Hillel Silver RD, Sasson Hugi Tower, Ramat Gan 5250606, Israel .

Name and Address of Owner

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Percent of Class

Moshe (Mori) Arkin (2)

Benad Goldwasser (3)

Yehu Ofer (2)

Einav Brenner (3)

Jacob Avinu (4)

Zeev Vurembrand (6)

Benad Goldwasser (5)

Moshe (Mori) Arkin (6)

Inbal Kreiss (7)

Jackson Schneider (8)

Eli Israeli (9)

Nir Nimrodi (9)

Ronit Rubin (10)

Einav Brenner

Carlo Papa (11)

Zeev Vurembrand (12)

Directors and officers as a group (12 individuals)

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

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

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

Based in part upon information contained in a Schedule 13G filed on March

6, 2025 by Mr.

Each of the beneficial owners named in the table had, to our knowledge and unless otherwise indicated, direct ownership

of and sole voting and investment power with respect to the shares of common stock beneficially owned by him or her.

options to purchase 547,491 shares of common stock that are currently exercisable or will become exercisable within 60 days of March

of options to purchase 61,664 shares of common stock that are currently exercisable or will become exercisable within 60 days of

March 18, 2026.

of options to purchase 138,332 shares of common stock that are currently exercisable or will become exercisable within 60 days of

March 18, 2026.

(i) options to purchase 614,038 shares of common stock which are currently exercisable or will become exercisable within 60 days

of March 20, 2025 and (ii) 75,000 shares of common stock beneficially owned directly by Prof.

Goldwasser’s spouse.

in part upon information contained in a Schedule 13G filed on March 6, 2025 by Mr.

Arkin to report holdings as of February 10, 2025.

The securities included herein are held (i) by Mr.

Arkin directly or

Arkin directly or by M.

Arkin (1999) Ltd., a company wholly-owned by Mr.

Arkin, as follows:

(a) 2,959,143 shares of common stock, (b) options to acquire

39,081 shares of common stock that are currently exercisable or will become exercisable within 60 days of March 25, 2025 and (c) warrants

to acquire 222,223 shares of common stock that are current exercisable;

(a) 2,959,143 shares of common stock, (b) options to acquire 56,579 shares of common stock that are currently exercisable

or will become exercisable within 60 days of March 18, 2026 and (c) warrants to acquire 222,223 shares of common stock that are

current exercisable;

and (ii) by Phoenix Insurance Company Ltd.

on behalf of Mr.

(a) 2,352,941 shares of common stock and (b) warrants to acquire 2,352,941 shares of common stock that are currently exercisable.

Includes (i) options to purchase 534,037 shares of common

stock which are currently exercisable or will become exercisable within 60 days of March 20, 2025 and (ii) 75,000 shares of common stock beneficially owned directly by Prof.

Goldwasser’s spouse.

Includes options to purchase 337,493 shares of common stock that are currently

exercisable or will become exercisable within 60 days of March 20, 2025.

Includes options to purchase 94,998 shares of common stock that are currently

exercisable or will become exercisable within 60 days of March 20, 2025.

Consists of options to purchase 33,524 shares of common stock that are

currently exercisable or will become exercisable within 60 days of March 20, 2025.

options to purchase 33,524 shares of common stock that are currently exercisable or will become exercisable within 60 days of March

Includes options to purchase 20,831 shares of common stock that are currently

exercisable or will become exercisable within 60 days of March 20, 2025.

Arkin, as follows:

(a) 2,352,941 shares of common

stock and (b) warrants to acquire 2,352,941 shares of common stock that are currently exercisable.

of options to purchase 51,023 shares of common stock that are currently exercisable or will become exercisable within 60 days of

March 18, 2026.

options to purchase 17,499 shares of common stock that are currently exercisable or will become exercisable within 60 days of March

options to purchase 12,499 shares of common stock that are currently exercisable or will become exercisable within 60 days of March

Based in part on information contained in a Schedule 13G filed on November

of options to purchase 44,998 shares of common stock that are currently exercisable or will become exercisable within 60 days of

March 18, 2026.

of options to purchase 34,998 shares of common stock that are currently exercisable or will become exercisable within 60 days of

March 18, 2026.

of options to purchase 29,998 shares of common stock that are currently exercisable or will become exercisable within 60 days of

March 18, 2026.

of options to purchase 14,999 shares of common stock that are currently exercisable or will become exercisable within 60 days of

March 18, 2026.

of options to purchase 51,023 shares of common stock that are currently exercisable or will become exercisable within 60 days of

March 18, 2026.

in part on information provided to or available to us and in part on information contained in a Schedule 13G filed on June 5, 2025

by Phoenix Financial Ltd.

to report holdings as of September 30, 2024.

The securities reported herein include 1,620,189 warrants

to purchase shares of common stock that are currently exercisable or will become exercisable within 60 days of March 20, 2025.

reported in the Schedule 13G are beneficially owned by various direct or indirect, majority or wholly-owned subsidiaries of Phoenix Financial

Ltd., which manage their own funds and/or the funds of others, including for holders of exchange-traded notes or various insurance policies,

members of pension or provident funds, unit holders of mutual funds and portfolio management clients.

Each of the subsidiaries of Phoenix

Financial Ltd.

operates under independent management and makes its own independent voting and investment decisions.

Not included as beneficially

owned by Phoenix Financial Ltd.

are shares of common stock and warrants to acquire shares of common stock that are currently exercisable,

each as held by Phoenix Insurance Company Ltd.

on behalf of Mr.

Arkin and included in the shares of common stock that are beneficially

Arkin, as indicated in footnote 4 above.

to report holdings as of March 31, 2025.

The securities reported herein include 1,620,189 warrants to purchase

shares of common stock that are currently exercisable.

Securities reported in the Schedule 13G are beneficially owned by various

direct or indirect, majority or wholly-owned subsidiaries of Phoenix Financial Ltd., which manage their own funds and/or the funds

of others, including for holders of exchange-traded notes or various insurance policies, members of pension or provident funds, unit

holders of mutual funds and portfolio management clients.

Each of the subsidiaries of Phoenix Financial Ltd.

operates under independent

management and makes its own independent voting and investment decisions.

Not included as beneficially owned by Phoenix Financial

are shares of common stock and warrants to acquire shares of common stock that are currently exercisable, each as held by Phoenix

Insurance on behalf of Mr.

Arkin and included in the shares of common stock that are beneficially owned by Mr.

Arkin, as indicated

in footnote 6 above.

The business address of Phoenix Financial Ltd.

is Derech Hashalom 53, Givataim 53454,

upon information contained in the Schedule 13G filed on March 13, 2025 by the Y.D.

is Derech Hashalom 53, Givataim 53454, Israel.

upon information contained in a Schedule 13G filed on January 8, 2026 by the Y.D.

More Investment Ltd., or Y.D.

More, to report

holdings as of February 10, 2025.

The securities reported herein include warrants to purchase 432,099 shares of common stock that

are currently exercisable.

Y.D More is an Israeli public company controlled through a voting agreement among the following

individuals and entities, each of which is a Reporting Person in the Schedule 13G:

More, to report holdings

as of January 6 2026.

The securities reported herein include warrants to purchase 432,099 shares of common stock that are currently

Y.D More is an Israeli public company controlled through a voting agreement among the following individuals and entities,

each of which is a reporting person in the Schedule 13G:

(a) Yosef Meirov, directly and through B.Y.M.

Investments Ltd., a company he controls with Michael Meirov and Dotan Meirov, (b) Benjamin Meirov (c) Yosef Levy and (d) Eli Levy

through Elldot Ltd., a wholly owned company.

Other reporting persons in the Schedule 13G include More Mutual Funds Management (2013)

and More Investment House Portfolio Management Ltd., each of which is a wholly-owned subsidiaries of Y.D.

More, and More

Provident Funds and Pension Ltd., which is a majority-owned subsidiary of Y.D.

The business address of the More Group is 2 Ben

Gurion Street, Ramat Gan, Israel.

Based on information provided to or available to us.

Mor Investments Ltd., a company

he controls with Michael Meirov and Dotan Meirov, (b) Benjamin Meirov (c) Yosef Levy and (d) Eli Levy through Elldot Ltd., a wholly

owned company.

Other reporting persons in the Schedule 13G include More Mutual Funds Management (2013) Ltd.

and More Investment House

Portfolio Management Ltd., each of which is a wholly-owned subsidiaries of Y.D.

More, and More Provident Funds and Pension Ltd.,

which is a majority-owned subsidiary of Y.D.

The business address of the More Group is 2 Ben Gurion Street, Ramat Gan, Israel.

on information provided to or available to us.

Sudoku Capital Ltd.

is an entity affiliated with Shmuel Harlap.

The business address of Sudoku Capital Ltd.

The business address

of Sudoku Capital Ltd.

is Sokolov 62, Ramat Hasharon, Israel.

on information contained in a Schedule 13G filed on February 20, 2025 by Kranot Hishtalmut Le Morim Ve Gananot Hevera Menahelet Ltd.

and Kranot Hishtalmut Le Morim Tichoniim Hevera Menahelet Ltd.

(the “Management Companies”) to report holdings as of February

in part on information provided to or available to us and in part on information contained in a Schedule 13G filed on February 20,

2025 by Kranot Hishtalmut Le Morim Ve Gananot Hevera Menahelet Ltd.

(on behalf of various investment paths, each of which is known

in Hebrew as a “maslul”) and Kranot Hishtalmut Le Morim Tichoniim Hevera Menahelet Ltd.

(on behalf of various investment

paths, each of which is known in Hebrew as a “maslul”), or the Management Companies, to report holdings as of February

The Management Companies, which manage various education funds (referred to in Hebrew as “kranot hishtalmut”),

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of 580,890 shares of common stock for grant to our employees, consultants, directors and other service providers.

15, 2020, our board of directors approved an increase to the 2020 Plan’s option pool by an additional 64,099 shares of

common stock.

On June 22, 2020, our board of directors approved an increase to the 2020 Plan’s option pool by an additional 401,950 shares

of common stock.

During the second quarter of 2021, our board of directors approved an increase to the 2020 Plan’s option pool

by an additional 777,778 shares of common stock.

During the first quarter of 2023, our board of directors approved an increase

to the 2020 Plan’s option pool by an additional 1,000,000 shares of common stock.

On March 15, 2020,

our board of directors approved an increase to the 2020 Plan’s option pool by an additional 64,099 shares of common stock.

22, 2020, our board of directors approved an increase to the 2020 Plan’s option pool by an additional 401,950 shares of common

During the second quarter of 2021, our board of directors approved an increase to the 2020 Plan’s option pool by an additional

777,778 shares of common stock.

During the first quarter of 2023, our board of directors approved an increase to the 2020 Plan’s

option pool by an additional 1,000,000 shares of common stock.

June 2024, our board of directors approved the 2024 Share Incentive Plan, or the 2024 Plan.

The 2024 Plan initially included a pool of 234,484 shares

of common stock, representing the number of shares remaining available for grant under the 2020 Plan.

These shares are available for

future grant to our employees, consultants, directors and other service providers.

Shares that were subject to awards granted under either

the 2020 Plan or the 2024 Plan that have expired or were cancelled or become un-exercisable for any reason without having been exercised

in full shall become available for future grant under the 2024 Plan.

In July 2024, our board of directors approved an increase to the

2024 Plan’s option pool by an additional 850,000 shares of common stock.

The 2024 Plan initially included a pool of

234,484 shares of common stock, representing the number of shares remaining available for grant under the 2020 Plan.

These shares are

available for future grant to our employees, consultants, directors and other service providers.

Shares that were subject to awards granted

under either the 2020 Plan or the 2024 Plan that have expired or were cancelled or become un-exercisable for any reason without having

been exercised in full shall become available for future grant under the 2024 Plan.

In July 2024, our board of directors approved an

increase to the 2024 Plan’s option pool by an additional 850,000 shares of common stock.

In December 2025, our stockholders voted

to approve an increase to the 2024 Plan’s option pool by an additional 777,000 shares of common stock.

following table provides certain information as of December 31, 2025, with respect to our equity compensation plans under which our equity

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The 2020 Plan provides for granting awards under various tax regimes, including, without limitation, in compliance with Section 102

of the Israeli Income Tax Ordinance (New Version), 5721-1961 (the “Ordinance”), and Section 3(i) of the Ordinance and for

awards granted to our United States employees or service providers, including those who are deemed to be residents of the United States

for tax purposes, Section 422 of the Internal Revenue Code (the “Code”) and Section 409A of the Code.

of the Israeli Income Tax Ordinance (New Version), 5721-1961, or the Ordinance, and Section 3(i) of the Ordinance and for awards granted

to our United States employees or service providers, including those who are deemed to be residents of the United States for tax purposes,

Section 422 of the Internal Revenue Code, or the Code, and Section 409A of the Code.

102 of the Ordinance allows employees, directors, and officers who are not controlling stockholders and are considered Israeli residents

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administrator.

On February 19, 2026, our board of directors approved a three-year extension of the expiration dates of certain outstanding

For more information, see “Item 11 — Executive Compensation — Director Compensation .”

The 2020 Plan provides for the grant of stock options (including incentive stock options and nonqualified stock options), shares

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of Employment.

For grantees who terminated their employment with us or any of its affiliates prior to July 5, 2022, all vested and

For grantees who terminated their employment with us or any of our affiliates prior to July 5, 2022, all vested and

exercisable awards held by such grantees as of the date of termination may be exercised within three months, unless otherwise determined

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have adopted the 2024 Plan, under which we may grant equity-based incentive awards to attract, motivate, and retain the talent for which

The maximum number of shares of common stock available for issuance under the 2024 Plan is equal to the sum of 1,084,484

shares, or such number as our board of directors may determine from time to time.

Awards granted under either the 2020 Plan or

the 2024 Plan that have expired or was cancelled or become un-exercisable for any reason without having been exercised in full, the shares

that were subject thereto shall become available for future grant under the 2024.

The maximum number of shares of common stock available for issuance under the 2024 Plan is 2,006,200 shares, or such number

as our board of directors may determine from time to time.

Awards granted under either the 2020 Plan or the 2024 Plan that have expired

or was cancelled or become un-exercisable for any reason without having been exercised in full, the shares that were subject thereto

shall become available for future grant under the 2024.

As of March 18, 2026, an aggregate of 1,252,414 shares have been granted under the 2024 Plan and 753,786 shares were available for future awards under the 2024 Plan.

Administration.

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The 2024 Plan provides for granting awards under various

tax regimes, including, without limitation, in compliance with Section 102 of the Israeli Income Tax Ordinance (New Version), 5721-1961

(the “Ordinance”), and Section 3(i) of the Ordinance and for awards granted to our United States employees or service providers,

including those who are deemed to be residents of the United States for tax purposes, Section 422 of the Internal Revenue Code (the “Code”)

and Section 409A of the Code.

tax regimes, including, without limitation, in compliance with Section 102 of the Ordinance and Section 3(i) of the Ordinance, and for

awards granted to our United States employees or service providers, including those who are deemed to be residents of the United States

for tax purposes, Section 422 of the Code, and Section 409A of the Code.

The 2024 Plan was approved by stockholders in July 2024.

102 of the Ordinance allows employees, directors and officers who are not controlling stockholders and are considered Israeli residents

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are not aware of any arrangement that might result in a change in control in the future.

We have no knowledge of any arrangements, including

any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s

We have no knowledge of any

arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change

in the Company’s control.

Certain relationships and related transactions, and director independence

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sharing the household with, any of these individuals, had or will have a direct or indirect material interest.

March 16, 2023, we entered into and consummated securities purchase agreements with (i) Phoenix Insurance Company Ltd.

who currently serves as a director on our board of directors, through his individual retirement account) and (ii) Phoenix Insurance and

Phoenix Amitim, in connection with the sale and issuance of an aggregate of 3,294,117 units, at a purchase price of $4.25 per unit, and

for an aggregate purchase price of $14,000,000.

Each unit consists of:

(i) one share of common stock and (ii) one warrant to purchase

one share of common stock with an exercise price of $5.50 (the “Warrants”).

The Warrants are immediately exercisable and

will expire three years from the date of issuance and will be subject to customary adjustments.

In connection with the private placement,

we undertook to file a Registration Statement on Form S-1 with the SEC covering the resale of the shares of common stock issued pursuant

to the private placement, the shares of common stock underlying the Warrants issued pursuant to the private placement, and any other

shares of common stock and shares of common stock underlying warrants to the extent previously issued to Mr.

Arkin, Phoenix Insurance

or Phoenix Amitim.

We further undertook that the Registration Statement on Form S-1 would not include any shares of common stock or other

securities for the account of any other holder without the prior written consent of Mr.

Arkin, Phoenix Insurance and Phoenix Amitim.

Arkin, Phoenix Insurance and Phoenix Amitim are our existing stockholders.

The shares of common stock and warrants were issued

pursuant to Regulation S of the Securities Act.

2023 we received development services in the amount of $29,000 from Smartec R&D Ltd., a company owned by our former CTO, Amir Govrin.

July 16, 2024, we issued 2,144,583 shares of our common stock in consideration for a purchase price of $4.80 per share to new and

existing investors, including Mr.

July 16, 2024, we issued 2,144,583 shares of our common stock in consideration for a purchase price of $4.80 per share to new and existing

investors, including Mr.

Arkin (via M.

Arkin (1999) Ltd.), who currently serves as a director on our board of directors, and The Phoenix Holdings,

through Phoenix Insurance and Phoenix Amitim.

We raised approximately $10 million in the private placement.

The shares of common

stock were issued pursuant to Regulation S of the Securities Act.

Arkin (1999) Ltd.), who currently serves as a director on our board of directors, and The Phoenix

Holdings, through Phoenix Insurance and Phoenix Amitim.

We raised approximately $10.3 million (gross) in the private placement.

of common stock were issued pursuant to Regulation S of the Securities Act.

February 2025, one or more entities affiliated with the More Group and Sudoku Capital Ltd.

(an entity affiliated with Shmuel Harlap),

purchased 1,046,672 shares and 1,153,846 shares, respectively ,

of our common stock in our underwritten public offering.

More Group was a more than 5% beneficial owner of our common stock prior to the underwritten public offering while Sudoku Capital became

a more than 5% beneficial owner following its participation in the underwritten public offering.

purchased 1,046,672 shares and 1,153,846 shares, respectively, of our common stock in our underwritten public offering.

More Group was

a more than 5% beneficial owner of our common stock prior to the underwritten public offering while Sudoku Capital became a more than

5% beneficial owner following its participation in the underwritten public offering.

July 27, 2025, we entered into a cloud services agreement with AllCloud for the provision of certain cloud services in an amount of up

to $100,000 per year.

Ronit Rubin, a member of our board of directors, serves as a Co-CEO of AllCloud.

The Company paid an aggregate

of $7 thousand to AllCloud in 2025.

August 13, 2025, we entered into a revised Director Appointment and Service Agreement with Jackson Schneider.

Under the revised agreement,

Schneider will receive a one-time commission for initiating or facilitating new commercial agreements between the Company and certain

pre-approved third parties.

For more information, see “Item 11 — Executive Compensation — Director Compensation .”

Indemnification

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out the responsibilities of a director.

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

Jackson Schneider, Ms.

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

Inbal Kreiss, Ms.

Ronit Rubin, Mr.

Vurembrand and Mr.

Nir Nimrodi do not have a relationship that would interfere with the exercise of independent judgment in carrying

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

Zeev Vurembrand and Mr.

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

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

Principal accounting fees and services

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firm in the Deloitte global network, for the fiscal years ended December 31, 2024 and December 31, 2025:

December 31, 2025

December 31, 2024

$ in thousands

Audit fees (1)

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

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Form of Notice of RSU Grant and RSU Agreement 2020 Share Incentive Plan (incorporated by reference to Exhibit 10.5 to our Annual Report on Form 10-K filed with the SEC on March 28, 2023)

Employment Agreement of Eli Israeli, dated September 19, 2023 (incorporated by reference to Exhibit 10.6 to our Registration Statement on Form S-1/A filed with the SEC on December 20, 2023)

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

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Employment Agreement of Yehu Ofer, dated July 13, 2022 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on October 18, 2022)

Employment Agreement of Jacob Avinu, dated September 20, 2022 (incorporated by reference to Exhibit 10.14 to our Registration Statement on Form S-1 filed with the SEC on July 17, 2023)

Amendment to Employment Agreement of Yehu Ofer, dated December 4, 2025 (incorporated by reference to Exhibit 10.1 to our Form 8-K filed with the SEC on December 4, 2025)

Agreement of Jacob Avinu entered into July 23, 2025 (incorporated by reference to Exhibit 10.1 to our Form 8-K filed with the SEC on

July 29, 2025)

Stock Purchase Agreement, dated March 16, 2023, by and between Odysight.ai Inc.

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and the Investors defined therein (incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed with the SEC on March 17, 2023)

Director Appointment and Service Agreement of Jackson Schneider, dated December 6, 2023 (incorporated by reference to Exhibit 10.18 to our Registration Statement on Form S-1/A filed with the SEC on December 20, 2023)

Director Appointment and Service Agreement of Jackson Schneider, dated August 13, 2025 (incorporated by reference to Exhibit 10.1 to our Form 10-Q filed with the SEC on August 13, 2025)

Employment Agreement of Einav Brenner, dated February 21, 2024 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on May 6, 2024)

Form of Subscription Order (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on July 15, 2024)

Director Appointment and Service Agreement of Carlo Papa, dated September 16, 2024.

Director Appointment and Service Agreement of Carlo Papa, dated September 16, 2024 (incorporated by reference to Exhibit 10.20 to our Annual Report on Form 10-K filed with the SEC on March 26, 2025)

Form of Underwriting Agreement (incorporated herein by reference to Exhibit 1.1 to our Registration Statement on Form S-1, as amended, filed with the SEC on January 28, 2025)

Agreement between Carlo Papa and Odysight.ai EU, dated February 18, 2025.

Insider Trading Policy

Agreement between Carlo Papa and Odysight.ai EU, dated February 18, 2025 (incorporated by reference to Exhibit 10.22 to our Annual Report on Form 10-K filed with the SEC on March 26, 2025)

Agreement between Carlo Papa and Odysight.ai Inc., dated July 1, 2025

between Eilam Sagi and Odysight.ai Ltd, dated November 13, 2025

Insider Trading Policy (incorporated by reference to Exhibit 19.1 to our Annual Report on Form 10-K filed with the SEC on March 26, 2025)

Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 to our Registration Statement on Form S-1/A filed with the SEC on January 24, 2025)

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

Executive Officer Clawback Policy

Executive Officer Clawback Policy (incorporated by reference to Exhibit 97.1 to our Annual Report on Form 10-K filed with the SEC on March 26, 2025)

XBRL Instance Document

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would likely cause competitive harm to us if publicly disclosed.

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

been omitted from this exhibit

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

from this exhibit

contract or compensatory plan or arrangement

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Benad Goldwasser

Jackson Shneider

Jackson Schneider

Zeev Vurembrand

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

Balance Sheets

Statements of Operations

Statements of Changes in Shareholders’ Equity

Statements of Cash Flows

to the Consolidated Financial Statements

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Changes in Shareholders’ Equity

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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on the Financial Statements

We have audited the accompanying consolidated balance sheets of Odysight.ai

and its Subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations,

changes in shareholders’ equity and cash flows, for each of the two years in the period ended December 31, 2024, and the related

notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements

present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its

operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles

generally accepted in the United States of America.

have audited the accompanying consolidated balance sheets of Odysight.ai Inc.

and its Subsidiaries (the “Company”) as of

December 31, 2025 and 2024, the related consolidated statements of operations, changes in shareholders’ equity and cash flows,

for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the

“consolidated financial statements”).

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

material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its

cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally

accepted in the United States of America.

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

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disclosures to which it relates.

— Customization and Development Services — Refer to Note 2l and 9 to the consolidated financial statements

— Customization and Development Services — Refer to Note 2k and 9 to the consolidated financial statements

Audit Matter Description

The Company recognizes revenue from customization and development services

that represent a single performance obligation over the duration of the respective contract (“over time”).

These revenues

are recognized commensurate with the progress of services, as products are produced and services are rendered, based on the effort expanded

through the reporting date relative to total estimated effort to satisfy the performance obligation.

During the year ended December 31,

2024 the Company recognized revenues from customization and development services in the amount of $863 thousands.

The accounting for these

contracts requires management to make judgments related to the total estimated amount and cost of man hours and materials required to

Company recognizes revenue from customization and development services that represent a single performance obligation over the duration

of the respective contract (“over time”).

These revenues are recognized commensurate with the progress of services, as products

are produced and services are rendered, based on the effort expanded through the reporting date relative to total estimated effort to

satisfy the performance obligation.

We identified revenue from customization and development services as a

critical audit matter because of the judgments made by management in estimating the total effort to satisfy the performance obligation.

This required a high degree of auditor judgment and an increased extent of effort, in relation to our audit as whole.

During the year ended December 31, 2025 the Company recognized revenues from customization and development

services in the amount of $1,150 thousand.

The accounting for these contracts requires management to make judgments related to the total

estimated amount and cost of man hours and materials required to satisfy the performance obligation.

identified revenue from customization and development services as a critical audit matter because of the judgments made by management

in estimating the total effort to satisfy the performance obligation.

This required a high degree of auditor judgment and an increased

extent of effort, in relation to our audit as whole.

the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to revenues from customization and development

services included the following, among others:

We obtained understanding

of the contractual terms.

We tested the accuracy of

the actual effort incurred through the reporting date to satisfy the performance obligation by performing a sample of actual costs

and obtaining supporting documents.

We evaluated reasonability

of estimated total effort to satisfy the performance obligation by:

– Inquiring of Company research and development personnel to understand the

process used to develop management’s estimate.

the amount of effort incurred to date to management’s historical estimates and inquiring

regarding differences.

sensitivity analysis over total estimated effort.

We tested the mathematical accuracy of management’s

calculation of effort expanded through the reporting date relative to total estimated effort.

/s/ Brightman Almagor Zohar & Co.

Certified Public Accountants

A Firm in the Deloitte Global Network

Tel Aviv, Israel

audit procedures related to revenues from customization and development services included the following, among others:

obtained an understanding of the contractual terms.

tested the accuracy of the actual effort incurred through the reporting date to satisfy the performance obligation by performing

a sample of actual costs and obtaining supporting documents.

evaluated the reasonability of estimated total effort to satisfy the performance obligation by:

of Company research and development personnel to understand the process used to develop management’s estimate.

the amount of effort incurred to date to management’s historical estimates and inquiring regarding differences.

tested the mathematical accuracy of management’s calculation of effort expanded through the reporting date relative to total

estimated effort.

Brightman Almagor Zohar & Co.

Public Accountants

Firm in the Deloitte Global Network

have served as the Company’s auditor since 2020.

(Formerly known as ScoutCam Inc.)

BALANCE SHEETS

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Cash and cash equivalents

Restricted cash

Restricted deposit

Short terms deposits

Accounts receivable

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Liability for severance pay

Other non-current liabilities

Total non-current liabilities

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Common stock, $ 0.001 par value;

300,000,000 shares authorized as of December 31, 2024 and December 31, 2023, 12,612,517 and 10,443,768

shares issued and outstanding as of December 31, 2024 and December 31, 2023

300,000,000 shares authorized as of December 31, 2025 and December

31, 2024, 16,357,327 and 12,612,517 shares issued and outstanding as of December 31, 2025 and December 31, 2024

Additional paid-in capital

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

(Formerly known as ScoutCam Inc.)

STATEMENTS OF OPERATIONS

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USD in thousands

(except per share

(except per share data)

COST OF REVENUES

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FINANCING INCOME, NET

LOSS BEFORE TAXES ON INCOME

TAXES ON INCOME

Net loss per share (basic and diluted, in USD)

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

(Formerly known as ScoutCam Inc.)

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

paid-in capital

Accumulated deficit

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Issuance of shares upon RSU vesting (see note 8)

Issuance of shares (see note 8)

Options exercise

Issuance of shares, net of issuance cost (see note 8)

Balance at December 31, 2025

paid-in capital

Accumulated deficit

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Issuance of shares upon RSU vesting (see note 8)

Issuance of shares and warrants (see note 8)

Issuance of shares, net of issuance cost (see note 8)

Balance at December 31, 2024

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

(Formerly known as ScoutCam Inc.)

STATEMENTS OF CASH FLOWS

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Stock based compensation

Profit (Loss) from exchange differences on cash and cash equivalents

Interest and exchange differences from operating lease liability

Severance pay asset and liability

Loss from exchange differences

Interest income in respect of deposits

CHANGES IN OPERATING ASSET AND LIABILITY:

Increase in accounts receivable

Decrease (Increase) in accounts receivable

Decrease in inventory

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Decrease in right-of-use asset

Decrease (increase) in other current and non-current assets

Increase (decrease) in account payable

Increase in other current and non-current assets

Severance pay asset and liability

Increase accounts payable

Decrease in contract fulfillment assets

Increase (decrease) in current and non-current contract liabilities

Decrease in current and non-current contract liabilities

Increase in accrued compensation expenses

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Investment in short terms deposits and restricted deposit

Net cash flows provided by (used in) investing activities

Net cash flows provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of shares and warrants

Proceeds from issuance of shares, net of issuance cost

Proceeds from options exercise

Net cash flows provided by financing activities

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

PROFITS (LOSS) FROM EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS

BALANCE OF CASH AND CASH EQUIVALENTS AT END OF YEAR

INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

BALANCE OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR

EFFECT FROM EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

BALANCE OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF YEAR

Reconciliation of cash, cash equivalents and restricted cash to the consolidated

balance sheet:

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents and restricted cash

The accompanying notes

are an integral part of these consolidated financial statements.

cash activities -

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Termination of right-of-use assets in exchange for cancellation of operating lease obligations

(Formerly known as ScoutCam Inc.)

The accompanying notes

are an integral part of these consolidated financial statements.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 – GENERAL :

Inc (the “Company”), formerly known as ScoutCam Inc., was incorporated under the laws of the State of Nevada on March

Company’s wholly owned subsidiary, Odysight.ai Ltd (“Odysight.ai”), formerly known as ScoutCam Ltd., was incorporated

Inc (the “Company”) was incorporated under the laws of the State of Nevada on March 22, 2013.

Company’s wholly owned subsidiary, Odysight.ai Ltd (“Odysight.ai”) was incorporated

in the State of Israel on January 3, 2019, and was merged into the Company on December 31, 2019, in a share exchange transaction,

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VIEW Ltd., a wholly owned subsidiary of the Company was incorporated in the State of Israel to act as a local

representative for the defense market in Israel.

On January 9, 2025, Odysight.Ai Eu S.r.l., a wholly owned subsidiary of the Company was incorporated under the laws of Italy.

References to the Company include the subsidiaries unless the context indicates otherwise.

Company, through its subsidiaries, provides vision-based platform solutions for the Predictive Maintenance (PdM) and Condition Based

Monitoring (CBM) markets with its visualization and AI platform.

The Company’s video sensor-based solutions

and its embedded software, and AI algorithms

are deployed in hard-to-reach locations and harsh environments across a variety of PdM and CBM use cases and allow maintenance and

operations teams visibility into areas which are inaccessible under normal operation, or where the operating ambience is not suitable

for continuous real-time monitoring.

Some of the Company’s products utilize micro visualization technology in medical devices

for minimally invasive medical procedures.

On February 11, 2025, Company’s completed its uplist

and its common stock began trading on the Nasdaq Capital Market under the symbol “ODYS”.

Prior to such date, the Company

was quoted on the OTCQB under the same symbol.

the incorporation of Odysight.ai, and through December 31, 2024, the Company accumulated a deficit of approximately $ 46

million and its activities have been funded mainly by its shareholders.

The Company’s management believes the Company’

cash and cash resources will allow the Company to fund its operating plan through at least the next 12 months from the filing date

of these Consolidated Financial Statements.

However, the Company expects to continue to incur significant research and development

and other costs related to its ongoing operations, which may require the Company to obtain additional funding in order to continue

its future operations until becoming profitable.

(Formerly known as ScoutCam Inc.)

representative for the defense market.

January 9, 2025, Odysight.ai Eu S.r.l., a wholly owned subsidiary of the Company was

incorporated under the laws of Italy.

to the Company include the subsidiaries unless the context indicates otherwise.

Company, through its subsidiaries, provides vision-based solutions for the Predictive Maintenance (PdM) and Condition Based

Monitoring (CBM) markets.

The Company’s video sensor-based solutions and its embedded

software, and AI algorithms are deployed in hard-to-reach locations and harsh environments across a variety of PdM and CBM use cases

and allow maintenance and operations teams visibility into areas which are inaccessible under normal operation, or where the operating

ambience is not suitable for continuous real-time monitoring.

February 2025, the Company completed a public offering, generating gross proceeds of approximately

$ 23.7 million.

Following the deduction of issuance costs, the Company received net proceeds

of approximately $ 20.9 million.

connection to this public offering, on February 11.

2025, the Company’s common stock, which prior to such date, were traded on

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

additional information see note 8(a)(4).

the incorporation of Odysight.ai and through December 31, 2025, the Company accumulated a deficit of approximately $ 63 million and

its activities have been funded mainly by its shareholders.

The Company’s management believes the Company’s cash

and cash resources will allow the Company to fund its operating plan through at least the next 12 months from the filing date of

these Consolidated Financial Statements.

However, the Company expects to continue to incur significant research and development and

other costs related to its ongoing operations, which may require the Company to obtain additional funding in order to continue its

future operations until becoming profitable.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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to known amounts of cash.

Short-term bank deposits

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

Such short-term bank

deposits are stated at cost which approximates fair market value.

(Formerly known as ScoutCam Inc.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 - SIGNIFICANT ACCOUNTING POLICIES (continued) :

Restricted deposit

The restricted deposits consist of funds that are contractually restricted

as to usage or withdrawal due to guarantees made to the Company’s client.

Restricted cash and restricted deposit

restricted cash and restricted deposit consist of funds that are contractually restricted as to usage or withdrawal due to

guarantees made to the Company’s client.

Restricted deposit are with maturities

of more than three months but less than one year.

Accounts receivable

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

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

The Company estimates

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

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

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

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SCHEDULE OF PROPERTY AND EQUIPMENT ANNUAL DEPRECIATION RATES

Machinery and laboratory equipment

Office furniture and equipment

Computers and computer software

Leasehold improvements

and laboratory equipment

furniture and equipment

and computer software

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

Severance pay

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

circumstances.

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

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

Contributions under Section 14 relieve Odysight.ai from any future severance payment obligation with respect to those employees.

The aforementioned contributions are not recorded as an asset on the Company’s balance sheet and there is no liability recorded,

as the Company does not have a future obligation to make any additional payments.

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

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

other circumstances.

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

Odysight.ai’s employees in Israel are entitled to a monthly contribution, at a rate of 8.33 % of their monthly salary, made in

their name with insurance companies.

Contributions under Section 14 relieve Odysight.ai from any future severance payment obligation

with respect to those employees.

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

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

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

application of Section 14.

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date on an undiscounted basis.

(Formerly known as ScoutCam Inc.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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awards granted to employees, directors and other providers for their services.

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

fair values on the grant dates.

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

option-pricing model.

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

stock price volatility and the expected option term.

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

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

Volatility 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.

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

on estimated fair values on the grant dates.

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

the Black-Scholes option-pricing model.

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

are the stock price volatility and the expected option term.

The Company’s expected dividend rate is zero since the Company does

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

Volatility is derived from a blend of the Company’s volatility and 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.

Federal Reserve.

The weighted average expected life of options was estimated

individually in respect of each grant.

Each of the above factors requires the Company to use judgment and make estimates in determining

the percentages and time periods used for the calculation.

If the Company were to use different percentages or time periods, the estimated

fair value of option awards could be materially different.

The Company recognizes stock-based compensation cost for option awards on

an accelerated basis over the employee’s requisite service period, forfeitures are accounted for as they occur.

The weighted average expected life of options

was estimated individually in respect of each grant.

Each of the above factors requires the Company to use judgment and make estimates

in determining the percentages and time periods used for the calculation.

If the Company were to use different percentages or time periods,

the estimated fair value of option awards could be materially different.

The Company recognizes stock-based compensation cost for option

awards on an accelerated basis over the employee’s requisite service period, forfeitures are accounted for as they occur.

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

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inventories are adjusted for estimated excess and obsolescence and written down to net realizable value based upon estimates of future

demand, technology developments and market conditions.

demand, technological developments and market conditions.

Revenue recognition

Company’s revenues are measured according to the ASC 606, “Revenue from Contracts with Customers” (“ASC 606”).

Company’s revenues are measured according to ASC 606, “Revenue from Contracts with Customers” (“ASC 606”).

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

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

(Formerly known as ScoutCam Inc.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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

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.

The Company measures the progress of services

using the input method, based on the effort expended relative to the estimated total effort to satisfy the performance

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.

The Company measures 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

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are excluded from revenues.

(Formerly known as ScoutCam Inc.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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tax benefits are recognized in tax expense.

The Company provides a valuation allowance, if necessary, to reduce deferred

tax assets to their estimated realizable value.

The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to

their estimated realizable value.

Legal contingencies

Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies.

From time to time, the Company may

become involved in legal proceedings or subject to claims arising in its ordinary course of business.

Such matters are generally

subject to many uncertainties and outcomes are not predictable with assurance.

The Company accrues for contingencies when the loss is

probable and can reasonably estimate the amount of any such loss.

(Formerly known as ScoutCam Inc.)

From time to time, the Company may become involved

in legal proceedings or subject to claims arising in its ordinary course of business.

Such matters are generally subject to many uncertainties

and outcomes are not predictable with assurance.

The Company accrues for contingencies when the loss is probable and can reasonably estimate

the amount of any such loss.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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Company has elected not to recognize on the balance sheet leases with terms of 12 months or less.

Segment reporting

Company has a single 1 operating and reportable segment.

The Company’s chief operating decision maker is its CEO, who reviews the

financial information for the purposes of making operating decisions, assessing financial performance, and allocating resources.

information regarding the Company’s revenue as well as a summary of significant expense categories, see Note 16.

New accounting pronouncements

The Company adopted the following accounting

standards during the year:

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting

(Topic 280), Improvements to Reportable Segment Disclosures” (“ASU 2023-07”) to improve reportable segment disclosure

requirements through enhanced disclosures about significant segment expenses on an interim and annual basis.

All disclosure requirements

of ASU 2023-07 are also required for entities with a single reportable segment.

ASU 2023-07 is effective starting January 1, 2024 and

should be applied on a retrospective basis to all periods presented.

The adoption of this ASU did not have a material impact on the Company’s

financial statements (see also Note 16 ).

Company adopted the following accounting standards during the year:

December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This ASU requires disclosure

of specific categories in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold.

The amendment also includes other changes to improve the effectiveness of income tax disclosures, including further disaggregation of

income taxes paid for individually significant jurisdictions.

This ASU is effective for annual periods beginning after December 15, 2024.

The Company adopted ASU 2023-09 for the year ended December 31, 2025 on a prospective basis.

Accordingly, the expanded disclosures are

provided for the year ended December 31, 2025, while prior period disclosures have not been retroactively adjusted and continue to be

presented under the previous disclosure requirements.

As this update only impacts disclosures, its adoption did not have a material

impact on the Company’s consolidated financial position, results of operations, or cash flows.

See Note 6 Income

Taxes for additional information.

issued accounting pronouncements, not yet effective

December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” This guidance

is intended to enhance the transparency and decision-usefulness of income tax disclosures.

The amendments in ASU 2023-09 address investor

requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid

both in the U.S.

and in foreign jurisdictions.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 on a prospective

Early adoption is permitted, with the option to apply the standard retrospectively.

The Company is currently evaluating the impact that ASU 2023-09 will have on its related disclosures, and the transition method.

In November 2024, the FASB issued ASU 2024-03, “Income Statement–Reporting

Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses” (“ASU

2024-03”), which requires the disaggregation of certain expenses in the financial statements notes, to provide enhanced transparency

into the expense captions presented on the face of the consolidated statement of operations.

ASU 2024-03 is effective for annual reporting

periods beginning January 1, 2027 and interim periods beginning January 1, 2028 and may be applied either prospectively or retrospectively.

The Company is currently evaluating the impact that ASU 2024-03 will have on its related disclosures, and the transition method.

(Formerly known as ScoutCam Inc.)

In November 2024, the FASB

issued ASU 2024-03, “Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic

Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires the disaggregation of certain

expenses in the financial statements notes, to provide enhanced transparency into the expense captions presented on the face of the

consolidated statement of operations.

ASU 2024-03 is effective for annual reporting periods beginning January 1, 2027 and interim periods

beginning January 1, 2028 and may be applied either prospectively or retrospectively.

The Company is currently evaluating ASU 2024-03

and its effect on its consolidated financial statements and related disclosures.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

July 2025 the FASB issued ASU No.

2025-05 – Financial Instruments –

Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract

Assets, which provides a practical expedient for estimating expected credit losses on current

accounts receivable and current contract assets arising from transactions accounted for under

Topic 606 – Revenue from Contracts with Customers.

Under this practical expedient,

entities may assume that current conditions as of the balance sheet date do not change for

the remaining life of the asset.

ASU 2025-05 is effective for financial statements issued

for fiscal years beginning after December 15, 2025.

Early adoption is permitted.

is currently evaluating ASU 2025-05 and its effect on its consolidated financial statements

and disclosures.

November 2025, the FASB issued ASU No.

2025-11, Interim Reporting (Topic 270):

Improvements , which introduced new guidance on disclosures to provide clarity about the

current requirements for interim reporting.

This guidance is effective for the Company for

interim reporting periods within annual reporting periods beginning after December 15, 2027.

The Company is currently evaluating the impact ASU 2025-11 will have on its consolidated

financial statements.

October 2025, the FASB issued ASU No.

2025-10, Government Grants (Topic 832):

for Government Grants Received by Business Entities , which introduced authoritative guidance

on the accounting for government grants received by business entities.

This guidance is effective

for the Company for annual reporting periods beginning after December 15, 2028, and interim

reporting periods within those annual reporting periods.

The Company is currently evaluating

the impact ASU 2025-10 will have on its consolidated financial statements.

3 - INVENTORY :

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Inventory Net

the years 2024 and 2023, no impairment occurred.

During the first quarter of 2025, the Company

recognized an inventory impairment related to the Client in the amount of $ 203 thousand.

4 - PROPERTY AND EQUIPMENT, NET :

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expenses were $ 117 thousand and $ 123 thousand for the years ended December 31, 2025 and 2024, respectively.

(Formerly known as ScoutCam Inc.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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rates applicable to the income of the Israeli subsidiaries:

is taxed according to Israeli tax laws.

are taxed according to Israeli tax laws.

Israeli corporate tax rate from the year 2018 and onwards is 23 %.

rates applicable to the income of the U.S.

company, Odysight.ai Inc.:

Company is taxed according to U.S.

corporate tax rate from the year 2018 and onwards is 21 %.

corporate tax rate is 21 %.

rates applicable to the income of the Italian subsidiary :

Odysight.ai EU Srl.

is taxed according to Italian

Italy corporate tax rate is 24 %.

income taxes:

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Net deferred tax

of December 31, 2024, the Company has provided a full valuation allowance of $ 7,991 thousand in respect of deferred tax assets resulting

from tax loss carryforwards and other temporary differences.

Management currently believes that because the Company has a history

of losses, it is more likely than not that the deferred tax regarding the loss carryforward and other temporary differences will

not be realized in the foreseeable future.

(Formerly known as ScoutCam Inc.)

of December 31, 2025, the Company has provided a full valuation allowance of $ 12,791

thousand in respect of deferred tax assets resulting from tax loss carryforwards and other temporary differences.

currently believes that because the Company has a history of losses, it is more likely than not that the deferred tax regarding the

loss carryforward and other temporary differences will not be realized in the foreseeable future.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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carryforward tax losses:

of December 31, 2024, the Company has an accumulated tax loss carryforward of approximately $ 34,433

Carryforward tax losses in Israel are of unlimited duration.

Under the Tax Cut and Jobs Act of 2017 (the “Tax Act”) (subject

to modifications under the Coronavirus Aid, Relief, and Economic Security Act), federal net operating losses (NOL) incurred in

taxable years ending after December 31, 2017 and in future years may be carried forward indefinitely, but the deductibility of such

federal net operating losses is limited.

It is uncertain if and to what extent various states will conform to the newly enacted

federal tax law.

of December 31, 2025, the Company has an accumulated tax loss carryforward of approximately $ 55,700 thousand.

tax losses in Israel are of unlimited duration.

Under the Tax Cut and Jobs Act of 2017 (the “Tax Act”) (subject to modifications

under the Coronavirus Aid, Relief, and Economic Security Act), federal net operating losses (NOL) incurred in taxable years ending

after December 31, 2017 and in future years may be carried forward indefinitely, but the deductibility of such federal net operating

losses is limited.

It is uncertain if and to what extent various states will conform to the newly enacted federal tax law.

addition, under Section 382 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation

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of such deferred taxes.

The following table presents the reconciliation between

the Company’s theoretical income tax and effective income tax for the year ended December 31, 2025 after the adoption of ASU 2023-09.

The Company adopted ASU 2023-09 prospectively for the year

ended December 31, 2025.

SCHEDULE OF EFFECTIVE INCOME TAX

Year ended December 31, 2025

USD in thousands

Loss before taxes as reported in the consolidated statements of income

Federal Statutory rate tax

Theoretical Tax Income

Foreign Tax Effects:

Statutory tax rate difference

Non-deductible items – Stock based compensation

Non-deductible items – other

Changes in valuation allowances

Other countries

Changes in valuation allowances

Non-deductible items

Currency differences

Effective Tax Expense

paid for income taxes:

Company did not pay any significant income taxes between 2024-2025.

Disaggregation

Domestic and foreign components of loss before income taxes were as follows for the years ended December 31, 2025 and 2024:

OF DOMESTIC AND FOREIGN COMPONENTS OF LOSS BEFORE INCOME TAXES

Year ended December 31,

USD in thousands

Domestic (US)

Foreign (Israel and Italy) *

* 99 % of the Foreign

is amount related to Israel

Tax Positions

Company had no uncertain tax positions as of December 31, 2025 and December 31, 2024.

7 – RELATED PARTIES :

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Directors (directors’ accrued compensation)

Smartec R&D Ltd.

Related parties

(Formerly known as ScoutCam Inc.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

of the authorized share capital

February 5, 2021, the Company increased its authorized share capital of the Company by an additional

225,000,000 shares of common stock par value $ 0.001 per share, such that the authorized share capital of the Company following such increase

shall be consisting of 300,000,000 shares of common stock.

March 29, 2021, the Company issued to certain investors, including Arkin, a major stockholder of the Company, of which Moshe (Mori) Arkin,

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

Each such unit

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

March 29, 2021, the Company issued to certain investors, including Arkin, a major stockholder of the Company, of which Moshe (Mori)

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

such unit consisted of (i) one share of common stock and (ii) one warrant to purchase one share of common stock with an exercise

price of $ 10.35 per share.

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

Pursuant to the terms of the foregoing

warrants, following April 1, 2024, if the closing price of Company common stock equal or exceeds 135 % of the aforementioned exercise

price (subject to appropriate adjustments for stock splits, stock dividends, stock combinations and other similar transactions after

the issue date of the warrants) for any thirty (30) consecutive trading days, the Company may force the exercise of the warrants,

Pursuant to the terms

of the foregoing warrants, following April 1, 2024, if the closing price of Company common stock equal or exceeds 135 % of the aforementioned

exercise price (subject to appropriate adjustments for stock splits, stock dividends, stock combinations and other similar transactions

after the issue date of the warrants) for any thirty (30) consecutive trading days, the Company may force the exercise of the warrants,

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

March 16, 2023, the Company consummated a private placement with (i) Moshe Arkin and (ii) The Phoenix Insurance Company Ltd.

Shotfut Menayot Israel – Phoenix Amitim, for the sale of an aggregate amount of 3,294,117 units,

at a purchase price of $ 4.25 per

unit resulting in gross proceeds of $ 14,000,000 .

Shotfut Menayot Israel – Phoenix Amitim, for the sale of an aggregate amount of 3,294,117 units, at a purchase price of $ 4.25

per unit resulting in gross proceeds of $ 14,000,000 .

Each unit consisted of:

(i) one share of common stock and (ii) one warrant to purchase one share of common stock with an exercise

price of $ 5.50

The warrants are immediately exercisable and will expire three years from the date of issuance and will be subject to

customary adjustments.

On July 16, 2024, the Company issued 2,144,583

shares of its common stock in consideration for a purchase price of $ 4.80

per share to new and existing investors, including Mori Arkin and The Phoenix Holdings, through Phoenix Insurance and Phoenix

The gross proceeds from the issuance of securities

offered amounted to approximately $ 10.3 million.

After deducting issuance costs, the Company received proceeds of approximately

$ 9.8 million.

(Formerly known as ScoutCam Inc.)

(i) one share of common stock and (ii) one warrant to

purchase one share of common stock with an exercise price of $ 5.50 per share.

The warrants are immediately exercisable and will expire

three years from the date of issuance and will be subject to customary adjustments.

July 16, 2024, the Company issued 2,144,583 shares of its common stock in consideration for

a purchase price of $ 4.80 per share to new and existing investors, including Mori Arkin and

The Phoenix Holdings, through Phoenix Insurance and Phoenix Amitim.

The gross proceeds from

the issuance of securities offered amounted to approximately $ 10.3 million.

After deducting

issuance costs, the Company received proceeds of approximately $ 9.8 million.

On February 12, 2025, the Company completed a U.S.

underwritten public offering issuing 3,307,692

shares of the Company’s common stock at a price of $ 6.50

The Company also granted the underwriters a 30-day over-allotment option to purchase up to an additional 496,153

shares at a purchase price of $ 6.50

On February 14, 2025, the Company sold an additional 345,432

shares of common stock as a result of a partial exercise of the over-allotment option at the public offering price of $ 6.50

The unexercised over-allotment option has expired.

Following the exercise of the over-allotment option, the Company 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.

After deducting issuance

costs, the Company received proceeds of approximately $ 20.9

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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June 2024, the Company’s Board of Directors approved the 2024 Share Incentive Plan (the “2024 Plan”).

With adoption

of the 2024 Plan, the Company ceased making new awards under the 2020 Plan.

2024 Plan initially included a pool of 234,484 shares of common stock, representing the number of shares remaining available for grant

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Shares that were subject to awards granted under either the 2020 Plan or the 2024 Plan that have expired or were cancelled or become

un-exercisable for any reason without having been exercised in full shall become available for future grant under the 2024 Plan.

unexercisable for any reason without having been exercised in full shall become available for future grant under the 2024 Plan.

July 2024, the Company’s Board of Directors approved an increase to the 2024 Plan’s option pool by an additional 850,000

shares of common stock.

in July 2024, stockholders approved the 2024 Plan.

In December 2025, the Company’s

Board of Directors approved an increase to the 2024 Plan’s option pool by an additional 777,000 shares of common stock.

2020 Plan and 2024 Plan each provide for the grant of stock options (including incentive stock options and nonqualified stock options),

shares of common stock, restricted shares, restricted share units, and other share-based awards.

(Formerly known as ScoutCam Inc.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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Weighted average exercise price

Weighted Average Remaining Contractual

Weighted Average Remaining Contractual Term (years)

Aggregate Intrinsic Value (in thousands)

$ in thousands

Outstanding - January 1, 2024

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Options Exercisable - December 31, 2025

of December 31, 2024, the aggregate intrinsic value of options granted is calculated as the difference between the exercise price and

the closing price on the same date.

The aggregate intrinsic value

of options granted is calculated as the difference between the closing price and the exercise price on the same date.

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

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price of $ 4.0 -$ 6.5 , expected volatility of 99.39 %- 99.47 %, term of the options – 4.375 - 7 years and risk-free interest rate

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.

Federal Reserve.

The Company has 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 the Company’s stock-based compensation.

The weighted average expected life of options was estimated individually

in respect of each grant.

unrecognized compensation expense calculated under the fair-value method for stock options expected to vest as of December 31, 2024 is

approximately $ 3.4 million and is expected to be recognized over a weighted-average period of 1.43 years.

2024 and 2023, the Company’s Board of Directors authorized the grant of options to purchase 60,000 shares of common stock of the

Company and 150,000 shares of common stock of the Company, respectively, to Prof.

Goldwasser, the Chairman of the Board.

3.57 %- 4.10 %.

The unrecognized compensation expense

calculated under the fair-value method for stock options expected to vest as of December 31, 2025 is approximately $ 1.5 million

and is expected to be recognized over a weighted-average period of 1.19 years.

2024, the Company’s Board of Directors authorized the grant of options to purchase 60,000 shares of common stock of the Company

to directors of the Company.

Goldwasser, the Chairman of the Board.

2025 and 2024, the Company’s Board of Directors authorized the grant of options to purchase 50,000 shares of common stock of the

Company and 120,000 shares of common stock of the Company, respectively to directors of the Company (not including Chairman of the

2025 and 2024, the Company’s Board of Directors authorized the grant of options to purchase 150,000 shares of common stock of the

Company and 285,000 shares of common stock of the Company, respectively, to certain officers of the Company.

expense recorded by the Company in respect of its stock-based employees, directors and service providers compensation awards in

accordance with ASC 718-10 for the year ended December 31, 2024 and 2023 amounted to $ 2,329

thousand and $ 1,548

thousand, respectively.

(Formerly known as ScoutCam Inc.)

accordance with ASC 718-10 for the year ended December 31, 2025 and 2024 amounted to $ 3,067 thousand and $ 2,329 thousand,

respectively.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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date of grant based on the fair value of the Company’s common stock.

following table summarizes RSU activity for December 31, 2024:

SCHEDULE OF STOCK OPTION ACTIVITY

following table summarizes RSU activity:

SCHEDULE OF RESTRICTED STOCK UNIT (“RSU”) ACTIVITY

Amount of RSUs

Weighted Average Grant Date Fair Value

Weighted Average Grant Date Fair

Value per Share

Weighted Average Remaining Contractual

Outstanding - December 31, 2023

Outstanding – January 1, 2024

Unvested and Outstanding - December 31, 2024

Compensation expense recorded by the Company in respect of its stock-based employees, directors and service providers

compensation awards in accordance with ASC 718-10 for the year ended December 31, 2024 and 2023 amounted to $ 57 thousand and $ 116 thousand,

respectively.

unrecognized compensation expense calculated under the fair-value method for RSUs expected to vest as of December 31, 2024 is approximately

$ 13 thousand and is expected to be recognized over a weighted-average period of 0.92 years.

Unvested and Outstanding - December 31, 2025

expense recorded by the Company in respect of its stock-based employees, directors and service providers compensation awards in accordance

with ASC 718-10 for the year ended December 31, 2025 and 2024 amounted to $ 11 thousand and $ 57 thousand, respectively.

The unrecognized compensation expense

calculated under the fair-value method for RSUs expected to vest as of December 31, 2025 is approximately $ 1 thousand and

is expected to be recognized over a weighted-average period of 0.35 years.

following table sets forth the total stock-based payment expenses resulting from options and RSU granted, included in the statements

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Total expenses

(Formerly known as ScoutCam Inc.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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Disaggregation

the second quarter of 2022, the Company completed the development of a customer-specific project for a Fortune 500 multinational

healthcare corporation (“customer A”) and moved from the development phase of the project to its production phase.

result, during the year ended December 31, 2024, the Company recognized development services revenues and related development costs

that had been previously deferred, in the amounts of $ 422 thousand and $ 239 thousand, respectively.

The amounts were recognized based

on the expected manufacturing term of the product, which the Company estimates at 7 years.

addition, following the commencement of the production phase, the Company recognized product revenues of $ 2,578

thousand during the year ended December 31,

2024 from the sale of units of the product developed in the context of these development services.

the year ended December 31, 2024 the Company recognized revenues from customization and development services in which the performance

obligation is satisfied over time in the amount of $ 863

During the second quarter of 2022, the Company completed the development of a customer-specific project for a Fortune 500 medical company customer (the “Client”) and moved from the project development phase to its production phase.

Through March 30, 2025, the Company recognized development services revenues and costs that had been previously deferred based on the expected manufacturing term of the product, which the Company estimated originally at seven years.

During the first quarter of 2025, due to the fact that the Company has not received a purchase order from the Client and does not expect to receive such order, the Company decided to fully derecognize the fulfilment asset and contract liability associated with the Client, in the amount of $ 957 thousand and $ 1,690 thousand, respectively.

of $ 847 thousand related to the

Client, presented under the “accounts receivable” of the balance sheet as of

December 31, 2024, was paid in full during 2025.

the year ended December 31, 2025 the Company recognized revenues from customization and development services in which the

performance obligation is satisfied over time in the amount of $ 1,150 thousand.

by geographical area (based on the location of customers)

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USD in thousands

(Formerly known as ScoutCam Inc.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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Balance at beginning of year

Contract fulfilment assets, Balance at beginning of the period

Contract costs recognized during the period

Balance at end of year

Contract fulfilment assets, Balance at end of the period

change in contract liabilities:

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Balance at beginning of year

Deferred revenue relating to new sales

Contract liabilities, Balance at beginning of the period

Deferred revenue during the year

Revenue recognized during the year

Balance at end of year

Contract liabilities, Balance at end of the period

Performance Obligations

Performance Obligations (“RPO”) represents contracted revenue that has not yet been recognized, which includes deferred revenue

and amounts that are expected to be invoiced and recognized as revenue in future periods.

As of December 31, 2024, the total RPO amounted

to approximately $15 million.

The total RPO amount includes an amount exceeding $10 million related to a long-term purchase order agreement

signed in the third quarter of 2024 with a leading international defense contractor.

(Formerly known as ScoutCam Inc.)

Performance Obligations (“RPO”) represents contracted revenue that has not yet been recognized, which includes deferred

revenue and amounts that are expected to be invoiced and recognized as revenue in future periods.

As of December 31, 2025, the total

RPO amounted to approximately $ 13.8 million.

The total RPO amount includes an amount exceeding $ 10 million

related to a long-term purchase order agreement signed in the third quarter of 2024 with a leading international defense

TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 2020, Odysight.ai

entered into a lease agreement for office space in Omer, Israel (“Original Space”), with the 36-month term for such

agreement beginning on January 1, 2021.

March 2021, Odysight.ai entered into a lease agreement for additional office space in Omer, Israel (“Additional Space”),

with the term for such agreement ending in December 31, 2023.

June 25, 2023, Odysight.ai entered into an amendment to these agreements pursuant to which the lease for the Additional Space was

shortened and ended on June 30, 2023 and th e lease for the Original Space was extended for an additional five years until December

It was also agreed that Odysight.ai has an option to terminate the agreement for the Original Space after three years.

expect that the lease period will be three years.

December 2020, Odysight.ai entered into a lease agreement for office space in Omer, Israel (“Original Space”), with the 36-month

term for such agreement beginning on January 1, 2021.

In March 2021, Odysight.ai entered into a lease agreement for additional office

space in Omer, Israel (“Additional Space”), with the term for such agreement ending in December 31, 2023.

June 25, 2023, Odysight.ai entered into an amendment to these agreements pursuant to which the lease for the Additional Space was shortened

and ended on June 30, 2023 and the lease for the Original Space was extended for an additional five years until December 31, 2028.

was also agreed that Odysight.ai has an option to terminate the agreement for the Original Space with six months’ notice

during the first three years.

2025, the Company provided six months’ notice indicating its intention to terminate the lease agreement as of May 2026.

lease payments under the agreement for the Original Space are approximately $ 7 thousand.

In March 2026,

the Company signed a two-year lease agreement for alternative office space in Omer.

Gan office space

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addition, the Company leases vehicles under various operating lease agreements.

December 31, 2024, the Company’s ROU assets and lease liabilities for operating leases totaled $ 1,113 thousand and $ 1,047 thousand,

respectively.

On December 31, 2025, the Company’s

ROU assets and lease liabilities for operating leases totaled $ 739 thousand and $ 770 thousand, respectively.

December 31, 2024, the Company’s ROU assets and lease liabilities for operating leases totaled $ 1,113 thousand and $ 1,047 thousand,

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Weighted-average discount rate- leases offices

(Formerly known as ScoutCam Inc.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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Salaries and related expenses

Stock-based compensation

Materials and subcontractors

Rent and maintenance and other expenses

Travel expenses

Vehicle expenses

Rent and maintenance and other expenses

Stock-based compensation

Inventory impairment

Cost of revenues

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Vehicle expenses

Travel expenses

Other expenses

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Rent and maintenance and other expenses

Travel expenses

General and administrative

(Formerly known as ScoutCam Inc.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

15 - COMMITMENTS AND CONTINGENCIES

April 2023, the Company received approval from the Israel Innovation Authority (previously the Office of the Chief Scientist), (the “IIA”)

to support and enhance the Company’s production line and capabilities in the next 24 months until April 2025.

Pursuant to the agreement

with the IIA relating to the program, the Company has to pay royalties of 3% to the IIA up to the amount IIA funding received and the

accrued interest repayment of the grant is contingent upon the Company successfully completing its enhancement plans and generating sales

from the enhancements preformed.

The Company has no obligation to repay these grants if its enhancement plans are not completed or aborted

or if it generates no sales.

April 2023, the Company received approval from the Israel Innovation Authority (the “IIA”) to support and enhance the Company’s

production line and capabilities in the next 24 months until April 2025.

Pursuant to the agreement with the IIA relating to the program,

the Company is required pay royalties of 3% to the IIA up to the amount IIA funding received and the accrued interest repayment of the

grant is contingent upon the Company successfully completing its enhancement plans and generating sales from the enhancements performed.

The Company has no obligation to repay these grants if its enhancement plans are not completed or aborted or if it generates no sales.

of December 31, 2025, we received IIA royalty-bearing grants totaling approximately NIS 515,000 (approximately $ 130,000 ).

16 — SEGMENT REPORTING

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platform solutions as described in Note 1.

Chief Executive Officer assesses performance for this segment and decides how to allocate resource.

The measure of segment assets is reported on the balance

sheet as total assets.

The chief executive officer performs the assessment of segment performance by using the reported

measure of segment profit or loss to monitor budget versus actual results.

chief executive officer assesses performance for this segment and decides how to allocate resources.

The measure of segment

assets is reported on the balance sheet as total assets.

The chief executive officer performs the assessment of segment performance by

using the reported measure of segment profit or loss to monitor budget versus actual results.

table below summarizes the significant expense categories regularly reviewed by the CODM for the years ended December 31, 2025 and 2024:

OF SEGMENT REPORTING INFORMATION

SCHEDULE OF SEGMENT REPORTING INFORMATION

Year ended December 31,

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Other segment items:

Share-based payments

Share-based compensation

Inventory impairment

Finance income, net

(*) Excluding share-based

payments, depreciation expense and finance income, net

share-based payments, inventory impairment, depreciation expense and finance income, net.

17 - SUBSEQUENT EVENTS :

On January 9, 2025, the Company formed a wholly-owned subsidiary, Odysight.Ai

Eu S.r.l., a private company organized under the laws of Italy.

On February 12, 2025, the

Company completed a U.S.

underwritten public offering issuing 3,307,692 shares

of the Company’s common stock at a public offering price of $ 6.50 per

The Company also granted the underwriters a 30-day over-allotment option to purchase up to an additional 496,153 shares

at a purchase price of $ 6.50 per

On February 14, 2025, the

Company sold an additional 345,432 shares

of common stock as a result of a partial exercise of the over-allotment option at the public offering price of $ 6.50 per

Following the exercise of

the over-allotment option, the Company 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.

On February 11,

2025, the Company’s common stock began trading on the Nasdaq Capital Market under the symbol “ODYS”.

February 28, 2026, after the reporting date, “The Lion’s Roar Operation”

(the “Operation”) commenced, a joint military operation by the United States

and Israel involving attacks in Iran.

In response, Iran launched ballistic missiles and unmanned

aerial vehicles (UAVs) toward Israel and certain states in the Persian Gulf region.

events have resulted in civilian casualties and property damage in Israel.

Additionally,

Hezbollah, a terrorist organization in Lebanon, joined the attacks against Israel and Israel

has started military operations in Lebanon.

the commencement of the Operation, Israel’s Home Front Command announced a “special home front situation” and updated

safety guidelines that include, among other measures, restrictions on passenger flights, limitations on gatherings, broad reserve recruitment,

and temporary closure of certain businesses, which has contributed to a partial reduction in economic activity in Israel.

a result of these guidelines, the Company’s offices in Israel were closed on certain days during this period.

The Company does

not expect a substantial impact on its operations from the above-described events.

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 9A. Controls and Procedures