Odysightai Inc
For the period ended Sep 30, 2024. Filed Nov 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 14, 2024
ODYS$1.77+1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001493152-24-032172
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001493152-24-045352
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 99 previous paragraphs and 101 current paragraphs.
43 unchanged; 38 reworded; 20 added; 16 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
Unless otherwise designated, the terms “we,” “us,” “our,” “Odysight.ai,” “the Company,” and “our Company” refer to Odysight.ai Inc. and our wholly-owned subsidiaries, including Odysight.ai Ltd., a private company organized under the laws of the State of Israel.
Current report
Comparison of the nine months ended September 30, 2024 and 2023
Current report
The increase in cost of revenues was primarily due to an increase in revenues.
Current report
Research and development expenses for the nine months ended September 30, 2024 were $4,705,000, an increase of $598,000, or 15%, compared to $4,107,000 for the nine months ended September 30, 2023.
Current report
General and administrative expenses for the nine months ended September 30, 2024, were $3,929, 000, an increase of $704,000, or 22%, compared to $3,225,000 for the nine months ended September 30, 2023.
Current report
The increase in general and administrative expenses was primarily due to:
Current report
During the nine months ended September 30, 2024, cash provided by financing activities was $9.9 million, consisting of cash proceeds from issuance of shares, net of issuance costs.
Current report
The increase in cost of revenues was primarily due to increase in revenues.
Current report
Research and development expenses for the three months ended September 30, 2024 were $1,730,000, an increase of $376,000, or 28%, compared to $1,354,000 for the three months ended September 30, 2023.
Current report
The increase was mainly due to the following reasons:
Current report
Sales and marketing expenses for the three months ended September 30, 2024, were $347,000, an increase of $139,000, or 67%, compared to $208,000 for the three months ended September 30, 2023.
Current report
The increase was mainly due to the following reasons:
Current report
The increase in general and administrative expenses was primarily due to:
Current report
During the three months ended September 30, 2023, cash used in operating activities was $2.3 million, consisting of a net loss of $2.5 million, an unfavorable net change in operating assets and liabilities of $0.3 million and a non-cash benefit of $0.5 million. Our non-cash benefit consisted primarily of non-cash charges of $0.3 million for stock-based compensation.
Current report
For the three months ended September 30, 2024, net cash flows used in investing activities was $8,000, attributable mainly to a purchase of property and equipment.
Current report
For the three months ended September 30, 2023, net cash provided by investing Activity was $15 million, consisting mainly of withdrawal, net on short-term deposits.
Current report
During the three months ended September 30, 2024, cash provided by financing activities was $9.9 million, consisting of cash proceeds from issuance of shares, net of issuance costs.
Current report
Contractual Obligations and Commitments
Current report
During the nine months ended September 30, 2024, there were no material changes to our contractual obligations and commitments since the year ended December 31, 2023.
Current report
During July 2024, we closed a private placement in which we issued 2,144,583 shares of our common stock for a purchase price of $4.80 per share to new and existing investors resulting in gross proceeds of $10.3 million.
Removed paragraphs (16)
Previous report
Overview
Previous report
Comparison of the six months ended June 30, 2024 and 2023
Previous report
This decrease was primarily attributed to a reduction in the price of certain materials and improvements in the production process. These savings were partially offset by the increase in number of units sold and supplied to a Fortune 500 multinational healthcare corporation.
Previous report
Sales and marketing expenses for the six months ended June 30, 2024, were $459,000, a decrease of $210,000, or 31%, compared to $669,000 for the six months ended June 30, 2023.
Previous report
The increase was primarily due to:
Previous report
an increase in professional services expenses due to the hiring of a financial consultant, IR consultant, HR consultant and the appointment of new directors; and
Previous report
an increase in stock-based compensation due to new options grants.
Previous report
During the six months ended June 30, 2024, cash provided by investing activities was $8 million, attributable mainly to a withdrawal, net of short-term deposits.
Previous report
This decrease was primarily attributed to a reduction in the price of certain materials and improvements in the production process. These savings were partially offset by the increase in number of units sold and supplied to a Fortune 500 multinational healthcare corporation.
Previous report
Research and development expenses for the three months ended June 30, 2024 were $1,408,000, an increase of $53,000, or 4%, compared to $1,355,000 for the three months ended June 30, 2023.
Previous report
Sales and marketing expenses for the three months ended June 30, 2024, were $225,000, a decrease of $268,000, or 54%, compared to $493,000 for the three months ended June 30, 2023.
Previous report
General and administrative expenses for the three months ended June 30, 2024, were $1,245,000, an increase of $77,000, or 7% compared to $1,168,000 for the three months ended June 30, 2023.
Previous report
The increase was primarily due to:
Previous report
an increase in professional services expenses due to the hiring of an IR consultant and the appointment of new directors; and
Previous report
an increase in stock-based compensation due to new options grants.
Previous report
During the three months ended June 30, 2024, cash used in operating activities was $2.1 million, consisting of net loss of $2.2 million, an unfavourable net change in operating assets and liabilities of $0.6 million and a non-cash benefit of $0.7 million. Our non-cash benefit consisted primarily of non-cash charges of $0.5 million for stock-based compensation. The net change in our operating assets and liabilities primarily reflects cash outflows from changes in accounts receivable.
Reworded paragraphs (38)
Previous wording
The Company’s primary business activity during last few months was enlarging our focus on R&D activities in the domain of I4.0 (including PdM and CBM in sectors such as aerospace, maritime energy and other heavy machinery, engines and complicated mechanics which have a need for monitoring and predictive maintenance applications). The main effect of this activity was to enable the Company to accelerate its growth and support the anticipated increased workload and solution development requirements.
Current wording
Our primary business activity in prior quarters was enlarging our focus on R&D activities in the domain of PdM and CBM (we refer to these applications as Industry 4.0, or I4.0), including in sectors such as aerospace, maritime energy and other heavy machinery, engines and complicated mechanics which require ongoing monitoring and predictive maintenance applications. The main effect of this activity was to enable the Company to accelerate its growth and support an increased workload and solution development requirements from customers.
Previous wording
The following table summarizes our results of operations for the six months period ended June 30, 2024 and 2023, together with the changes in those items in dollars and as a percentage:
Current wording
The following table summarizes our results of operations for the nine months period ended September 30, 2024 and 2023, together with the changes in those items in dollars and as a percentage:
Previous wording
For the six months ended June 30, 2024, we generated revenues of $1,368,000, an increase of $391,000, or 40%, as compared to the six months ended June 30, 2023.
Current wording
For the nine months ended September 30, 2024, we generated revenues of $2,660,000, an increase of $1,573,000, or 145 %, compared to revenues of $1,087,000 for the nine months ended September 30, 2023.
Previous wording
The increase in revenues was primarily attributable to the increase in revenues from a Fortune 500 multinational healthcare corporation, as well as recognition of revenues from Industry 4.0.
Current wording
The increase in revenues was primarily attributable to an increase in revenues from a Fortune 500 multinational healthcare corporation, as well as recognition of revenues from Industry 4.0.
Previous wording
The increase in revenues from a Fortune 500 multinational healthcare corporation (see note 5 to our interim financial statements) due to:
Current wording
The increase in revenues from a Fortune 500 multinational healthcare corporation (see note 6 to our interim financial statements) was mainly due to:
Previous wording
Cost of revenue is primarily comprised of cost of personnel, certain allocated expenses related to facilities, logistics and quality control.
Current wording
Cost of revenue is primarily comprised of cost of personnel and certain allocated expenses related to facilities, logistics and quality control.
Previous wording
Cost of revenues for the six months ended June 30, 2024, was $1,077,000, a decrease of $250,000, or 19%, compared to cost of revenues of $1,327,000 for the six months ended June 30, 2023.
Current wording
Cost of revenues for the nine months ended September 30, 2024 was $1,964,000, an increase of $316,000, or 19%, compared to cost of revenues of $1,648,000 for the nine months ended September 30, 2023.
Previous wording
Gross profit for the six months ended June 30, 2024, was $291,000. Gross loss for the six months ended June 30, 2023, was $350,000.
Current wording
Gross profit for the nine months ended September 30, 2024, was $696,000. Gross loss for the nine months ended September 30, 2023, was $561,000.
Previous wording
The change was due to both increase in revenues and decrease in cost of revenues, as described above.
Current wording
The change was due to both an increase in revenues and an increase in cost of revenues, as described above.
Previous wording
The transition from a gross loss to a gross profit is attributable to:
Current wording
The transition from a gross loss to a gross profit was principally attributable to:
Previous wording
Research and development efforts are focused on new products development, as well as developing and enhancing functionality for our existing products. These expenses primarily consist of employee-related expenses, including salaries, benefits, and stock-based compensation expense for personnel engaged in research and development functions, consulting, and professional fees related to research and development activities, prototype materials, facility costs, and other allocated expenses, including costs related to rent and maintenance of our facility, utilities, depreciation, and other supplies. We expense research and development costs as incurred.
Current wording
Research and development efforts are focused on new product development, as well as developing and enhancing functionality for our existing products. These expenses primarily consist of employee-related expenses, including salaries, benefits, and stock-based compensation expense for personnel engaged in research and development functions, consulting, and professional fees related to research and development activities, prototype materials, facility costs, and other allocated expenses, including costs related to rent and maintenance of our facilities, utilities, depreciation, and other supplies. We expense research and development costs as incurred.
Previous wording
The increase was primarily attributable to an increase in payroll and related expenses for new employees’ recruitment.
Current wording
The increase in research and development expenses was mainly due to an increase in payroll and related expenses for new employee recruitment but also attributable in part to:
Previous wording
Research and development expenses for the six months ended June 30, 2024, were $2,975,000, an increase of $222,000, or 8%, compared to $2,753,000 for the six months ended June 30, 2023.
Current wording
Sales and marketing expenses for the nine months ended September 30, 2024 were $806,000, a decrease of $71,000, or 8%, compared to $877,000 for the nine months ended September 30, 2023.
Previous wording
During the six months ended June 30, 2023, the Company incurred significant expenses related to rebranding activities. These activities included costs associated, inter alia, with altering the Company’s name, design of a new logo and the creation of new promotional materials. Additionally, the Company participated in the Paris Air Show in June 2023, the world’s premier and largest event dedicated to the aviation and space industry.
Current wording
The decrease in sales and marketing expenses was mainly due to one-time expenses incurred during the nine months ended September 30, 2023 which did not reoccur during the nine months ended September 30, 2024. During the nine months ended September 30, 2023, we incurred significant expenses related to rebranding activities. These activities included costs associated, inter alia, with altering our name, design of a new logo, and the creation of new promotional materials.
Previous wording
We expect that our selling and marketing expenses will increase as we expand our commercial activity in the I4.0 domain.
Current wording
We expect that our sales and marketing expenses will increase as we expand our commercial activity in the I4.0 domain.
Previous wording
We incurred an operating loss of $5,728,000 for the six months ended June 30, 2024, a decrease of $170,000, or 3%, compared to operating loss of $5,898,000 for the six months ended June 30, 2023.
Current wording
We incurred an operating loss of $8,744,000 for the nine months ended September 30, 2024, a decrease of $26,000, or 0.3%, compared to operating loss of $8,770,000 for the nine months ended September 30, 2023.
Previous wording
During the six months ended June 30, 2024, cash used in operating activities was $3.3 million, consisting of net loss of $5.3 million, partially offset by an unfavourable net change in operating assets and liabilities of $0.9 million and a non-cash benefit of $1.1 million. Our non-cash benefit consisted primarily of non-cash charges for stock-based compensation. The net change in our operating assets and liabilities primarily reflects cash inflows from changes in accounts receivable and accrued compensation expenses, partially offset by outflows from changes in current and non-current other assets.
Current wording
During the nine months ended September 30, 2024, cash used in operating activities was $5.5 million, consisting of net loss of $8.2 million, partially offset by a favorable net change in operating assets and liabilities of $1 million and a non-cash benefit of $1.7 million. Our non-cash benefit consisted primarily of non-cash charges for stock-based compensation. The net change in our operating assets and liabilities primarily reflects cash inflows from changes in accounts receivable and accrued compensation expenses, partially offset by outflows from changes in current and non-current other assets and contract liabilities.
Previous wording
During the six months ended June 30, 2023, cash used in operating activities was $5.1 million, consisting of net loss of $5.5 million, an unfavourable net change in operating assets and liabilities of $0.3 million, partially offset by a non-cash benefit of $0.8 million. Our non-cash benefit consisted primarily of non-cash charges for stock-based compensation. The net change in our operating assets and liabilities primarily reflects cash outflows from changes in contract liability and other current assets, was partially offset by inflows from changes in accounts payables and other accounts payables.
Current wording
During the nine months ended September 30, 2023, cash used in operating activities was $7.3 million, consisting of a net loss of $8.1 million, an unfavorable net change in operating assets and liabilities of $0.5 million, partially offset by a non-cash benefit of $1.3 million. Our non-cash benefit consisted primarily of non-cash charges for stock-based compensation.
Previous wording
For the three months ended June 30, 2024, net cash flows provided by investing activities was $8 million, attributable mainly to a withdrawal, net on short-term deposits.
Current wording
For the nine months ended September 30, 2024, net cash flows provided by investing activities was $8 million, consisting mainly of withdrawal of short-term deposits.
Previous wording
For the three months ended June 30, 2023, net cash flows used in investing activities was $3.5 million, consisting mainly of investment, net on short-term deposits.
Current wording
For the nine months ended September 30, 2023, net cash flows used in investing activities was $0.6 million, consisting mainly of investment, net on short-term deposits.
Previous wording
During the six months ended June 30, 2023, cash provided by financing activities was $13.9 million, consisting of cash proceeds from issuance of shares and warrants, net of issuance costs.
Current wording
During the nine months ended September 30, 2023, cash provided by financing activities was $13.9 million, consisting of cash proceeds from issuance of shares and warrants, net of issuance costs.
Previous wording
For the three months ended June 30, 2024, we generated revenues of $1,181,000, an increase of $507,000, or 75%, as compared to the three months ended June 30, 2023.
Current wording
For the three months ended September 30, 2024, we generated revenues of $1,292,000, an increase of $1,182,000, or 1,075%, compared to revenues of $110,000 for the three months ended September 30, 2023.
Previous wording
The increase in revenues was primarily attributable to the increase in revenues from a Fortune 500 multinational healthcare corporation, as well as recognition of revenues from Industry 4.01
Current wording
The increase in revenues was primarily attributable to an increase in revenues from a Fortune 500 multinational healthcare corporation, as well as recognition of revenues from Industry 4.0.
Previous wording
The increase in revenues from a Fortune 500 multinational healthcare corporation (see note 5 to our interim financial statements) due to:
Current wording
The increase in revenues from a Fortune 500 multinational healthcare corporation (see note 6 to our interim financial statements) was mainly due to:
Previous wording
Cost of revenue is primarily comprised of cost of personnel, certain allocated expenses related to facilities, logistics and quality control.
Current wording
Cost of revenue is primarily comprised of cost of personnel and certain allocated expenses related to facilities, logistics, and quality control.
Previous wording
Cost of revenues for the three months ended June 30, 2024, was $667,000, a decrease of $110,000, or 14%, compared to cost of revenues of $777,000 for the three months ended June 30, 2023.
Current wording
Cost of revenues for the three months ended September 30, 2024 was $887,000, an increase of $566,000, or 176%, compared to cost of revenues of $321,000 for the three months ended September 30, 2023.
Previous wording
Gross profit for the three months ended June 30, 2024, was $514,000. Gross loss for the three months ended June 30, 2023 was $103,000.
Current wording
Gross profit for the three months ended September 30, 2024, was $405,000 compared to gross loss for the three months ended September 30, 2023 of $211,000.
Previous wording
The change was due to both increase in revenues and decrease in cost of revenues as described above.
Current wording
The change was due to both an increase in revenues and an increase in cost of revenues, as described above.
Previous wording
The transition from a gross loss to a gross profit is attributable to:
Current wording
The transition from a gross loss to a gross profit was principally attributable to:
Previous wording
Research and development efforts are focused on new products development, as well as developing and enhancing functionality for our existing products. These expenses primarily consist of employee-related expenses, including salaries, benefits, and stock-based compensation expense for personnel engaged in research and development functions, consulting, and professional fees related to research and development activities, prototype materials, facility costs, and other allocated expenses, including cost related to rent and maintenance of our facility, utilities, depreciation, and other supplies. We expense research and development costs as incurred.
Current wording
Research and development efforts are focused on new products development, as well as developing and enhancing functionality for our existing products. These expenses primarily consist of employee-related expenses, including salaries, benefits, and stock-based compensation expense for personnel engaged in research and development functions, consulting, and professional fees related to research and development activities, prototype materials, facility costs, and other allocated expenses, including cost related to rent and maintenance of our facilities, utilities, depreciation, and other supplies. We expense research and development costs as incurred.
Previous wording
We expect that our research and development expenses will increase as we continue to develop our products and services in the I4.0 domain.
Current wording
We expect that our research and development expenses will increase as we continue to develop and improve our products and services in the I4.0 domain.
Previous wording
We expect that our selling and marketing expenses will increase as we expand our commercial activity in the I4.0 domain.
Current wording
We expect that our sales and marketing expenses will increase as we expand our commercial activity in the I4.0 domain.
Previous wording
General and administrative expenses for the six months ended June 30, 2024, were $2,585,000, an increase of $459,000, or 22%, compared to $2,126,000 for the six months ended June 30, 2023.
Current wording
General and administrative expenses for the three months ended September 30, 2024, were $1,344,000, an increase of $245,000, or 22%, compared to $1,099,000 for the three months ended September 30, 2023.
Previous wording
We incurred an operating loss of $2,364,000 for the three months ended June 30, 2024, a decrease of $755,000, or 24%, compared to operating loss of $3,119,000 for the three months ended June 30, 2023.
Current wording
We incurred an operating loss of $3,016,000 for the three months ended September 30, 2024, an increase of $144,000, or 5%, compared to operating loss of $2,872,000 for the three months ended September 30, 2023.
Previous wording
The decrease in operating loss was primarily due to an increase in gross profit and a decrease in sales and marketing expenses, partially offset by increase in expenses related to research and development and general and administrative expenses, each as described above.
Current wording
The increase in operating loss was primarily due to an increase in sales and marketing expenses, research and development expenses, and general and administrative expenses, partially offset by an increase in gross profit, each as described above.
Previous wording
During the three months ended June 30, 2023, cash used in operating activities was $2.6 million, consisting of net loss of $2.9 million, a favourable net change in operating assets and liabilities of $0.1 million and a non-cash benefit of $0.2 million. Our non-cash benefit consisted primarily of non-cash charges of $0.3 million for stock-based compensation.
Current wording
During the three months ended September 30, 2024, cash used in operating activities was $2.2 million, consisting of net loss of $2.9 million, a favorable net change in operating assets and liabilities of $0.1 million and a non-cash benefit of $0.5 million. Our non-cash benefit consisted primarily of non-cash charges of $0.5 million for stock-based compensation.
Previous wording
For the three months ended June 30, 2023, net cash flows used in financing activities was $64,000, consisting of issuance expenses.
Current wording
For the three months ended September 30, 2023, net cash flows used in financing activities was $78,000, consisting of issuance expenses.
Previous wording
As of June 30, 2024, we had cash, cash equivalents and restricted cash of $13.5 compared to cash and cash equivalents and short-term deposits of $17 million as of December 31, 2023. In addition, as of June 30, 2024, we incurred an accumulated deficit of approximately $39.6 million, as compared to $34.2 million as of December 31, 2023.
Current wording
As of September 30, 2024, we had cash, cash equivalents and restricted cash of $21 million compared to cash and cash equivalents and short-term deposits of $17 million as of December 31, 2023. In addition, as of September 30, 2024, we incurred an accumulated deficit of approximately $42.4 million, as compared to $34.2 million as of December 31, 2023.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
During the six months ended June 30, 2023, cash used in investing activities was $15.6 million, consisting mainly of investment, net on short-term deposits.
Previous report — wording carried elsewhere
During the three months ended June 30, 2023, the Company incurred significant expenses related to rebranding activities. These activities included costs associated, inter alia, with altering the Company’s name, design of a new logo and the creation of new promotional materials. Additionally, the Company participated in the Paris Air Show in June 2023, the world’s premier and largest event dedicated to the aviation and space industry.