Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 08, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 333-188920 | |
Entity Registrant Name | SCOUTCAM INC. | |
Entity Central Index Key | 0001577445 | |
Entity Tax Identification Number | 47-4257143 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | Suite 7A | |
Entity Address, Address Line Two | Industrial Park | |
Entity Address, Address Line Three | P.O. Box 3030 | |
Entity Address, City or Town | Omer | |
Entity Address, Country | IL | |
Entity Address, Postal Zip Code | 8496500 | |
City Area Code | 972 | |
Local Phone Number | 73 370-4691 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 10,432,518 |
Interim Condensed Consolidated
Interim Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 9,583 | $ 10,099 |
Short terms deposits | 15,005 | 3,047 |
Accounts receivable | 61 | 60 |
Inventory | 693 | 630 |
Other current assets | 564 | 281 |
Total current assets | 25,906 | 14,117 |
NON-CURRENT ASSETS: | ||
Contract fulfillment assets | 1,435 | 1,495 |
Property and equipment, net | 508 | 648 |
Operating lease right-of-use assets | 346 | 307 |
Severance pay asset | 268 | 328 |
Total non-current assets | 2,557 | 2,778 |
TOTAL ASSETS | 28,463 | 16,895 |
CURRENT LIABILITIES: | ||
Accounts payable | 365 | 297 |
Contract liabilities - short term | 1,304 | 1,426 |
Operating lease liabilities - short term | 195 | 199 |
Accrued compensation expenses | 352 | 365 |
Related parties | $ 8 | $ 58 |
Other Liability, Current, Related and Nonrelated Party Status [Extensible Enumeration] | us-gaap:RelatedPartyMember | us-gaap:RelatedPartyMember |
Other accrued expenses | $ 396 | $ 214 |
Total current liabilities | 2,620 | 2,559 |
NON-CURRENT LIABILITIES: | ||
Contract liabilities - long term | 2,112 | 2,218 |
Operating lease liabilities - long term | 94 | 64 |
Liability for severance pay | 262 | 268 |
Total non-current liabilities | 2,468 | 2,550 |
TOTAL LIABILITIES | 5,088 | 5,109 |
SHAREHOLDERS’ EQUITY: | ||
Common stock, $0.001 par value; 300,000,000 shares authorized as of March 31, 2023 and December 31, 2022, 10,432,518 and 7,121,737 shares issued and outstanding as of March 31, 2023 and December 31, 2022 , respectively | 10 | 7 |
Additional paid-in capital | 50,813 | 36,541 |
Accumulated deficit | (27,448) | (24,762) |
TOTAL SHAREHOLDERS’ EQUITY | 23,375 | 11,786 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 28,463 | $ 16,895 |
Interim Condensed Consolidate_2
Interim Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 10,432,518 | 7,121,737 |
Common stock, shares outstanding | 10,432,518 | 7,121,737 |
Interim Condensed Consolidate_3
Interim Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
REVENUES | $ 303 | $ 2 |
COST OF REVENUES | 550 | 288 |
GROSS LOSS | (247) | (286) |
RESEARCH AND DEVELOPMENT EXPENSES | 1,398 | 954 |
SALES AND MARKETING EXPENSES | 176 | 243 |
GENERAL AND ADMINISTRATIVE EXPENSES | 958 | 1,286 |
OPERATING LOSS | (2,779) | (2,769) |
OTHER INCOME | 7 | 8 |
FINANCING INCOME (EXPENSES), NET | 86 | (27) |
NET LOSS | $ (2,686) | $ (2,788) |
Net loss per ordinary share (basic and diluted, USD) | $ (0.37) | $ (0.39) |
Weighted average ordinary shares (basic and diluted, in thousands) | 7,276 | 7,122 |
Interim Condensed Consolidate_4
Interim Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total | ||
Balance at Dec. 31, 2021 | $ 7 | $ 34,903 | $ (15,294) | $ 19,616 | ||
Balance, shares at Dec. 31, 2021 | 7,122 | |||||
Stock based compensation | 772 | 772 | ||||
Net loss | (2,788) | (2,788) | ||||
Balance at Mar. 31, 2022 | $ 7 | 35,675 | (18,082) | 17,600 | ||
Balance, shares at Mar. 31, 2022 | 7,122 | |||||
Balance at Dec. 31, 2022 | $ 7 | 36,541 | (24,762) | 11,786 | ||
Balance, shares at Dec. 31, 2022 | 7,122 | |||||
Stock based compensation | 348 | 348 | ||||
RSU vesting | [1] | [1] | ||||
Balance, shares | 17 | |||||
Issuance of shares and warrants | $ 3 | 13,924 | 13,927 | |||
Balance, shares | 3,294 | |||||
Net loss | (2,686) | (2,686) | ||||
Balance at Mar. 31, 2023 | $ 10 | $ 50,813 | $ (27,448) | $ 23,375 | ||
Balance, shares at Mar. 31, 2023 | 10,433 | |||||
[1]Represents an amount less than $1 thousand |
Interim Condensed Consolidate_5
Interim Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (2,686) | $ (2,788) |
Adjustments to reconcile net loss to net cash used in operations: | ||
Depreciation | 155 | 50 |
Stock based compensation | 348 | 772 |
Severance pay asset and liability | 54 | |
Profit from exchange differences from operating lease liability | (9) | (10) |
Profit from exchange differences on cash and cash equivalents | 4 | 41 |
Interest income in respect of deposits | 42 | (13) |
CHANGES IN OPERATING ASSET AND LIABILITY ITEMS: | ||
Increase in accounts receivable | (1) | (6) |
Increase in inventory | (63) | (23) |
Decrease in operating lease liability | (48) | (16) |
Decrease in ROU asset | 44 | 19 |
Decrease (increase) in other current assets | (283) | 27 |
Increase in account payables | 68 | 124 |
Decrease in related parties | (50) | (39) |
Decrease in contract fulfillment assets | 60 | |
Increase (decrease) in contract liabilities | (228) | 1,616 |
Increase (decrease) in accrued compensation expenses | (63) | 20 |
Increase in other accrued expenses | 182 | 2 |
Net cash flows used in operating activities | (2,474) | (224) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (15) | (24) |
Withdrawal of short terms deposits | 3,000 | |
Investment in short term deposits | (15,000) | |
Net cash flows used in investing activities | (12,015) | (24) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of shares and warrants | 13,977 | |
Net cash flows provided by financing activities | 13,977 | |
DECREASE IN CASH AND CASH EQUIVALENTS | (512) | (248) |
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 10,099 | 8,581 |
LOSS FROM EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS | (4) | (41) |
BALANCE OF CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 9,583 | 8,292 |
Non cash activities | ||
Right-of-use assets obtained in exchange for operating lease liabilities | 83 | 46 |
Issuance expenses | $ 50 |
GENERAL
GENERAL | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | NOTE 1 – GENERAL a ScoutCam Inc. (the “Company”), formerly known as Intellisense Solutions Inc., (“Intellisense”), was incorporated under the laws of the State of Nevada on March 22, 2013. Prior to the closing of the Exchange Agreement (as defined below), the Company was a non-operating “shell company”. The Company’s wholly owned subsidiary, ScoutCam Ltd. (“ScoutCam”), was formed in the State of Israel on January 3, 2019, as a wholly-owned subsidiary of Medigus Ltd. (“Medigus”), an Israeli company traded on the Nasdaq Capital Market, and commenced operations on March 1, 2019. In December 2019, Medigus and ScoutCam consummated an asset transfer agreement, under which Medigus transferred and assigned certain assets and intellectual property rights related to its miniaturized imaging business to ScoutCam. On December 30, 2019, Intellisense and Medigus consummated a securities exchange agreement (the “Exchange Agreement”), pursuant to which Medigus delivered 100% of its holdings in ScoutCam to Intellisense in exchange for shares of Intellisense’s common stock representing 60% of the issued and outstanding share capital of Intellisense immediately upon the consummation of the Exchange Agreement. As of March 31, 2023, Medigus beneficially owned 18.45% of the Company’s outstanding common stock. The Company, through ScoutCam, is engaged in the development, production and marketing of Predictive Maintenance (PdM) and Condition Based Monitoring (CBM) technologies, providing visual sensing and AI-based video analytics solutions for systems in the aviation, maritime, industrial non-destructing-testing industries, transportation, and energy industries. Some of the Company’s products utilize micro visualization technology in medical devices for minimally invasive medical procedures. SCOUTCAM INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 – GENERAL b Since incorporation of ScoutCam and through March 31, 2023, the Company accumulated a deficit of approximately $27.4 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 Interim Condensed Consolidated Financial Statements. However, the Company expects to continue to incur significant research and development and other costs related to its ongoing operations, requiring the Company to obtain additional funding in order to continue its future operations until becoming profitable. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES a. Unaudited Interim Financial Statements The accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included (consisting only of normal recurring adjustments except as otherwise discussed). For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Group’s Annual Report on Form 10-K for the year ended December 31, 2022. b. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation. c. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The Company evaluates on an ongoing basis its assumptions, including those related to contingencies, deferred taxes, inventory impairment, stock-based compensation, as well as in estimates used in applying the revenue recognition policy. Actual results may differ from those estimates. d. Significant Accounting Policies The significant accounting policies followed in the preparation of these unaudited interim condensed consolidated financial statements are identical to those applied in the preparation of the latest annual financial statements. e. Recent Accounting Pronouncements Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Group’s condensed consolidated financial statements. SCOUTCAM INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2023 | |
Leases | |
LEASES | NOTE 3 – LEASES On March 31, 2023, the Group’s ROU assets and lease liabilities for operating leases totaled $ 346 289 In December 2020, ScoutCam entered into a lease agreement for office space in Omer, Israel. The agreement is for 36 months beginning on January 1, 2021. In March 2021, ScoutCam entered into a lease agreement for additional office space in Omer, Israel. The agreement is until December 31, 2023. Monthly lease payments under the agreements are approximately $ 12 thousand. ScoutCam subleases part of the office space to a third party for $ 3 thousand per month. In December 2022, ScoutCam entered into a lease agreement for office space in Ramat Gan, Israel. The agreement is for 12 months beginning on December 14, 2022. Therefore, the Company has elected to use the practical expedient regarding short-term leases. 3 In addition, the Company leases vehicles under various operating lease agreements. Lease expenses recorded in the interim consolidated statements of operations were $ 57 Supplemental cash flow information related to operating leases was as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO OPERATING LEASES Three months ended March 31, 2023 USD in thousands Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 57 As of March 31, 2023, the Company’s operating leases had a weighted average remaining lease term of 0.85 6 The maturities of lease liabilities under operating leases as of March 31, 2023 are as follows: SCHEDULE OF MATURITIES LEASE LIABILITIES UNDER OPERATING LEASES Operating leases USD in thousands Remainder of 2023 175 2024 85 2025 44 Total undiscounted lease payments 304 Less: Imputed interest (15 ) Total lease liabilities 289 SCOUTCAM INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
EQUITY | NOTE 4 – EQUITY a. Private Placement On March 16, 2023, the Company consummated Stock Purchase Agreements for a private placement with (i) Moshe Arkin through his individual retirement account and (ii) The Phoenix Insurance Company Ltd. and Shotfut Menayot Israel – Phoenix Amitim, in connection with the sale and issuance of an aggregated amount of 3,294,117 4.25 14,000,000 0.001 5.50 three years Warrants: As of March 31, 2023, the Company had the following outstanding warrants to purchase common stock: SCHEDULE OF STOCK WARRANTS OUTSTANDING TO PURCHASE COMMON STOCK Warrant Issuance Date Expiration Date Exercise Price Per Share ($) Number of Shares of common stock Underlying Warrants March 2021 Warrant March 29, 2021 March 31, 2026 10.35 2,469,156 March 2023 Warrant March 27, 2023 March 26, 2026 5.50 3,294,117 5,763,273 SCOUTCAM INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 4 – EQUITY b. Stock-based compensation to employees, directors and service providers: In February 2020, the Company’s Board of Directors approved the 2020 Share Incentive Plan (the “Plan”). The Plan initially included a pool of 580,890 64,099 401,950 777,778 1,000,000 The Plan is designed to enable the Company to grant options to purchase shares of common stock and RSUs under various and different tax regimes including, without limitation: (i) pursuant and subject to Section 102 of the Israeli Tax Ordinance or any provision which may amend or replace it and any regulations, rules, orders or procedures promulgated thereunder and to designate them as either grants made through a trustee or not through a trustee; and (ii) pursuant and subject to Section 3 (i) of the Israeli Tax Ordinance. Stock option activity During the three months ended March 31, 2023, the Company granted 57,000 The fair value of each option was estimated as of the date of grant or reporting period using the Black-Scholes option-pricing model, using the following assumptions: SCHEDULE OF SHARE-BASED PAYMENT, STOCK OPTIONS, VALUATION ASSUMPTIONS Three months ended March 31, 2023 Underlying value of ordinary shares ($) 5 Exercise price ($) 4.5 Expected volatility (%) 37.5 % Term of the options (years) 7 Risk-free interest rate 3.94 % The cost of the benefit embodied in the options granted during the three months ended March 31, 2023, based on their fair value as of the grant date, is estimated to be approximately $ 142 The following table summarizes stock option activity for the three months ended March 31, 2023: SCHEDULE OF STOCK OPTION ACTIVITY For the Three months ended March 31, 2023 Amount of options Weighted average exercise price $ Outstanding at beginning of period 1,560,040 3.64 Granted 57,000 4.50 Fortfeited (18,512 ) 3.37 Outstanding at end of period 1,598,528 3.68 Vested at end of period 908,803 3.15 SCOUTCAM INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 4 – EQUITY Restricted stock unit (“RSU”) activity Each RSU will vest based on continued service which is generally over three years. The grant date fair value of the award will be recognized as stock-based compensation expense over the requisite service period. The fair value of restricted stock units was estimated on the date of grant based on the fair value of the Company’s common stock. The following table summarizes RSU activity for the three months ended March 31, 2023: SCHEDULE OF STOCK OPTION ACTIVITY For the Three months ended March 31, 2023 Amount of RSUs Weighted Average $ Outstanding at beginning of period 50,000 6.32 Vested (16,664 ) 6.32 Unvested and Outstanding at end of period 33,336 6.32 The following table sets forth the total stock-based payment expenses resulting from options granted, included in the statements of operation and comprehensive income: SCHEDULE OF TOTAL SHARE-BASED PAYMENT EXPENSES Three months ended March 31, 2023 USD in thousands Cost of revenues 3 Research and development 140 Sales and marketing expenses 41 General and administrative 164 Total expenses 348 SCOUTCAM INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
REVENUES
REVENUES | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | NOTE 5 – REVENUES Disaggregation of revenue SCHEDULE OF DISAGGREGATION OF REVENUE 2023 2022 Three months ended March 31, 2023 2022 USD in thousands Development Services ( * 106 - Products 197 2 Revenue 303 2 (*) During the second quarter of 2022, the Company completed the development of the product relating to a customer-specific project for a Fortune 500 multinational healthcare corporation and moved from the development phase of the project to its production phase. As a result, during the three months ended March 31, 2023, the Company recognized development services revenues and related development costs that had been previously deferred, in the amounts of $ 106 7 In addition, following the commencement of the production phase, the Company recognized product revenues of $ 182 Contract fulfillment assets and Contract liabilities: The Company’s contract fulfillment assets and contract liabilities as of March 31, 2023 and December 31, 2022 were as follows: SCHEDULE OF CONTRACT FULFILLMENT ASSETS AND CONTRACT LIABILITIES March 31, December 31, 2023 2022 USD in thousands Contract fulfillment assets 1,435 1,495 Contract liabilities 3,416 3,644 Contract liabilities include advance payments, which are primarily related to advanced billings for development services. The change in contract fulfillment assets: March 31, December 31, 2023 2022 USD in thousands Balance at beginning of year 1,495 1,675 Contract costs recognized during the period (60 ) (180 ) Balance at end of year 1,435 1,495 The change in contract liabilities: March 31, December 31, 2023 2022 USD in thousands Balance at beginning of year 3,644 2,420 Deferred revenue relating to new sales - 1,613 Revenue recognized during the year (228 ) (389 ) Balance at end of year 3,416 3,644 Remaining Performance Obligations Remaining Performance Obligations (“RPO”) represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. As of March 31, 2023, the total RPO amounted to $ 3.4 |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 6 – INVENTORY Composed as follows: SCHEDULE OF INVENTORY March 31, December 31, 2023 2022 USD in thousands Raw materials and supplies 258 438 Work in progress 300 148 Finished goods 135 44 Inventory Net 693 630 During the period ended March 31, 2023, no SCOUTCAM INC. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
LOSS PER SHARE
LOSS PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | NOTE 7 – LOSS PER SHARE Basic loss per share is computed by dividing net loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares as described below. In computing the Company’s diluted loss per share, the numerator used in the basic loss per share computation is adjusted for the dilutive effect, if any, of the Company’s potential shares of common stock. The denominator for diluted loss per share is a computation of the weighted-average number of ordinary shares and the potential dilutive ordinary shares outstanding during the period. |
RELATED PARTIES
RELATED PARTIES | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | NOTE 8 – RELATED PARTIES a. Balances with related parties SCHEDULE OF BALANCES WITH RELATED PARTIES March 31, 2023 December 31, 2022 USD in thousands Directors (directors’ accrued compensation) - 48 Smartec R&D Ltd. (see b below) 8 10 Related parties 8 58 b. During the three months ended March 31, 2023, and March 31, 2022, the Company received development services from Smartec R&D Ltd., a company owned by the Company’s CTO. Total compensation during the three months ended March 31, 2023 and March 31, 2022 was approximately $ 29 25 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. The Company identified no subsequent events as of the date that the financial statements were issued. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Unaudited Interim Financial Statements | a. Unaudited Interim Financial Statements The accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included (consisting only of normal recurring adjustments except as otherwise discussed). For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Group’s Annual Report on Form 10-K for the year ended December 31, 2022. |
Principles of Consolidation | b. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation. |
Use of estimates | c. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The Company evaluates on an ongoing basis its assumptions, including those related to contingencies, deferred taxes, inventory impairment, stock-based compensation, as well as in estimates used in applying the revenue recognition policy. Actual results may differ from those estimates. |
Significant Accounting Policies | d. Significant Accounting Policies The significant accounting policies followed in the preparation of these unaudited interim condensed consolidated financial statements are identical to those applied in the preparation of the latest annual financial statements. |
Recent Accounting Pronouncements | e. Recent Accounting Pronouncements Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Group’s condensed consolidated financial statements. |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases | |
SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO OPERATING LEASES | Supplemental cash flow information related to operating leases was as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO OPERATING LEASES Three months ended March 31, 2023 USD in thousands Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 57 |
SCHEDULE OF MATURITIES LEASE LIABILITIES UNDER OPERATING LEASES | The maturities of lease liabilities under operating leases as of March 31, 2023 are as follows: SCHEDULE OF MATURITIES LEASE LIABILITIES UNDER OPERATING LEASES Operating leases USD in thousands Remainder of 2023 175 2024 85 2025 44 Total undiscounted lease payments 304 Less: Imputed interest (15 ) Total lease liabilities 289 |
EQUITY (Tables)
EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
SCHEDULE OF STOCK WARRANTS OUTSTANDING TO PURCHASE COMMON STOCK | As of March 31, 2023, the Company had the following outstanding warrants to purchase common stock: SCHEDULE OF STOCK WARRANTS OUTSTANDING TO PURCHASE COMMON STOCK Warrant Issuance Date Expiration Date Exercise Price Per Share ($) Number of Shares of common stock Underlying Warrants March 2021 Warrant March 29, 2021 March 31, 2026 10.35 2,469,156 March 2023 Warrant March 27, 2023 March 26, 2026 5.50 3,294,117 5,763,273 |
SCHEDULE OF SHARE-BASED PAYMENT, STOCK OPTIONS, VALUATION ASSUMPTIONS | The fair value of each option was estimated as of the date of grant or reporting period using the Black-Scholes option-pricing model, using the following assumptions: SCHEDULE OF SHARE-BASED PAYMENT, STOCK OPTIONS, VALUATION ASSUMPTIONS Three months ended March 31, 2023 Underlying value of ordinary shares ($) 5 Exercise price ($) 4.5 Expected volatility (%) 37.5 % Term of the options (years) 7 Risk-free interest rate 3.94 % |
SCHEDULE OF STOCK OPTION ACTIVITY | The following table summarizes stock option activity for the three months ended March 31, 2023: SCHEDULE OF STOCK OPTION ACTIVITY For the Three months ended March 31, 2023 Amount of options Weighted average exercise price $ Outstanding at beginning of period 1,560,040 3.64 Granted 57,000 4.50 Fortfeited (18,512 ) 3.37 Outstanding at end of period 1,598,528 3.68 Vested at end of period 908,803 3.15 |
SCHEDULE OF TOTAL SHARE-BASED PAYMENT EXPENSES | The following table sets forth the total stock-based payment expenses resulting from options granted, included in the statements of operation and comprehensive income: SCHEDULE OF TOTAL SHARE-BASED PAYMENT EXPENSES Three months ended March 31, 2023 USD in thousands Cost of revenues 3 Research and development 140 Sales and marketing expenses 41 General and administrative 164 Total expenses 348 |
Restricted Stock [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
SCHEDULE OF STOCK OPTION ACTIVITY | The following table summarizes RSU activity for the three months ended March 31, 2023: SCHEDULE OF STOCK OPTION ACTIVITY For the Three months ended March 31, 2023 Amount of RSUs Weighted Average $ Outstanding at beginning of period 50,000 6.32 Vested (16,664 ) 6.32 Unvested and Outstanding at end of period 33,336 6.32 |
REVENUES (Tables)
REVENUES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF DISAGGREGATION OF REVENUE | SCHEDULE OF DISAGGREGATION OF REVENUE 2023 2022 Three months ended March 31, 2023 2022 USD in thousands Development Services ( * 106 - Products 197 2 Revenue 303 2 (*) During the second quarter of 2022, the Company completed the development of the product relating to a customer-specific project for a Fortune 500 multinational healthcare corporation and moved from the development phase of the project to its production phase. As a result, during the three months ended March 31, 2023, the Company recognized development services revenues and related development costs that had been previously deferred, in the amounts of $ 106 7 In addition, following the commencement of the production phase, the Company recognized product revenues of $ 182 |
SCHEDULE OF CONTRACT FULFILLMENT ASSETS AND CONTRACT LIABILITIES | The Company’s contract fulfillment assets and contract liabilities as of March 31, 2023 and December 31, 2022 were as follows: SCHEDULE OF CONTRACT FULFILLMENT ASSETS AND CONTRACT LIABILITIES March 31, December 31, 2023 2022 USD in thousands Contract fulfillment assets 1,435 1,495 Contract liabilities 3,416 3,644 Contract liabilities include advance payments, which are primarily related to advanced billings for development services. The change in contract fulfillment assets: March 31, December 31, 2023 2022 USD in thousands Balance at beginning of year 1,495 1,675 Contract costs recognized during the period (60 ) (180 ) Balance at end of year 1,435 1,495 The change in contract liabilities: March 31, December 31, 2023 2022 USD in thousands Balance at beginning of year 3,644 2,420 Deferred revenue relating to new sales - 1,613 Revenue recognized during the year (228 ) (389 ) Balance at end of year 3,416 3,644 |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORY | Composed as follows: SCHEDULE OF INVENTORY March 31, December 31, 2023 2022 USD in thousands Raw materials and supplies 258 438 Work in progress 300 148 Finished goods 135 44 Inventory Net 693 630 |
RELATED PARTIES (Tables)
RELATED PARTIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
SCHEDULE OF BALANCES WITH RELATED PARTIES | a. Balances with related parties SCHEDULE OF BALANCES WITH RELATED PARTIES March 31, 2023 December 31, 2022 USD in thousands Directors (directors’ accrued compensation) - 48 Smartec R&D Ltd. (see b below) 8 10 Related parties 8 58 b. During the three months ended March 31, 2023, and March 31, 2022, the Company received development services from Smartec R&D Ltd., a company owned by the Company’s CTO. Total compensation during the three months ended March 31, 2023 and March 31, 2022 was approximately $ 29 25 |
SCHEDULE OF SUPPLEMENTAL CASH F
SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO OPERATING LEASES (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Leases | |
Operating cash flows from operating leases | $ 57 |
SCHEDULE OF MATURITIES LEASE LI
SCHEDULE OF MATURITIES LEASE LIABILITIES UNDER OPERATING LEASES (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Leases | |
Remainder of 2023 | $ 175 |
2024 | 85 |
2025 | 44 |
Total undiscounted lease payments | 304 |
Less: Imputed interest | (15) |
Total lease liabilities | $ 289 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Dec. 14, 2022 | Jan. 01, 2021 | Mar. 31, 2021 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2020 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Operating lease, right-of-use asset | $ 346 | $ 307 | ||||
Operating lease, liability | 289 | |||||
Operating Lease, Payments | 57 | |||||
Sublease income | $ 3 | |||||
Operating lease expense | $ 57 | |||||
Operating lease, weighted average remaining lease term | 10 months 6 days | |||||
Operating lease, weighted average discount rate, percent | 6% | |||||
Lease Agreement [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Lessee, operating lease, description | ScoutCam entered into a lease agreement for office space in Ramat Gan, Israel. The agreement is for 12 months beginning on December 14, 2022. | ScoutCam entered into a lease agreement for office space in Omer, Israel. The agreement is for 36 months beginning on January 1, 2021. | ||||
Operating Lease, Payments | $ 12 | |||||
Sublease income | $ 3 |
SCHEDULE OF STOCK WARRANTS OUTS
SCHEDULE OF STOCK WARRANTS OUTSTANDING TO PURCHASE COMMON STOCK (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Warrant March 2021 [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Warrant issuance date | Mar. 29, 2021 |
Warrant expiration date | Mar. 31, 2026 |
Warrant exercise price per share | $ / shares | $ 10.35 |
Number of shares of common stock underlying warrants | 2,469,156 |
Warrant March Two Thousand Twenty Three [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Warrant issuance date | Mar. 27, 2023 |
Warrant expiration date | Mar. 26, 2026 |
Warrant exercise price per share | $ / shares | $ 5.50 |
Number of shares of common stock underlying warrants | 3,294,117 |
Warrant [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Number of shares of common stock underlying warrants | 5,763,273 |
SCHEDULE OF SHARE-BASED PAYMENT
SCHEDULE OF SHARE-BASED PAYMENT, STOCK OPTIONS, VALUATION ASSUMPTIONS (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares | |
Equity [Abstract] | |
Underlying value of ordinary shares | $ 5 |
Exercise price | $ 4.5 |
Expected volatility rate | 37.50% |
Term of the options (years) | 7 years |
Risk-free interest rate | 3.94% |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Options, Outstanding at beginning of period | shares | 1,560,040 |
Weighted average exercise price, Outstanding at beginning of period | $ / shares | $ 3.64 |
Options, outstanding, granted | shares | 57,000 |
Weighted average exercise price, Granted | $ / shares | $ 4.50 |
Options, Cancelled | shares | (18,512) |
Weighted average exercise price, Cancelled | $ / shares | $ 3.37 |
Options, Outstanding at ending of period | shares | 1,598,528 |
Weighted average exercise price, Outstanding at end of period | $ / shares | $ 3.68 |
Options, outstanding, vested | shares | 908,803 |
Weighted average exercise price, Vested at end of period | $ / shares | $ 3.15 |
Restricted Stock Units (RSUs) [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Options, Outstanding at beginning of period | shares | 50,000 |
Options, Outstanding at ending of period | shares | 33,336 |
Weighted average grant date fair value per share, begining of period | $ / shares | $ 6.32 |
Options, outstanding, vested | shares | (16,664) |
Weighted average grant date fair value per share,vested | $ / shares | $ 6.32 |
Weighted average grant date fair value per share, unvested and outstanding ending balance | $ / shares | $ 6.32 |
SCHEDULE OF TOTAL SHARE-BASED P
SCHEDULE OF TOTAL SHARE-BASED PAYMENT EXPENSES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Stock-based payment expenses | $ 348 | $ 772 |
Cost of Sales [Member] | ||
Stock-based payment expenses | 3 | |
Research and Development Expense [Member] | ||
Stock-based payment expenses | 140 | |
Selling and Marketing Expense [Member] | ||
Stock-based payment expenses | 41 | |
General and Administrative Expense [Member] | ||
Stock-based payment expenses | $ 164 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |||||
Mar. 16, 2023 | Jun. 22, 2020 | Mar. 15, 2020 | Feb. 29, 2020 | Mar. 31, 2023 | Jun. 30, 2021 | Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Common stock par value, per share | $ 0.001 | $ 0.001 | |||||
Share based compensation arrangement Options grants in period gross | 57,000 | ||||||
Restricted Stock Units (RSUs) [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Share-based compensation arrangement by share-based payment award, options, vested in period, fair value | $ 142 | ||||||
2020 Share Incentive Plan [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Share based compensation arrangement Options grants in period gross | 57,000 | ||||||
2020 Share Incentive Plan [Member] | Employees, Consultants, Directors and Other Service Providers [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Share based compensation arrangement Options grants in period gross | 401,950 | 580,890 | |||||
2020 Share Incentive Plan [Member] | Board of Directors [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Share based compensation arrangement Options grants in period gross | 64,099 | 1,000,000 | 777,778 | ||||
Stock Purchase Agreements [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Issuance of units | 3,294,117 | ||||||
Purchase price | $ 4.25 | ||||||
Aggregate purchase price | $ 14,000,000 | ||||||
Stock Purchase Agreements [Member] | Common Stock [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Common stock par value, per share | $ 0.001 | ||||||
Stock Purchase Agreements [Member] | Warrant [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Exercise price | $ 5.50 | ||||||
Warrant exercisable term | 3 years |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 303 | $ 2 | |
Service [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | [1] | 106 | |
Product [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 197 | $ 2 | |
[1]During the second quarter of 2022, the Company completed the development of the product relating to a customer-specific project for a Fortune 500 multinational healthcare corporation and moved from the development phase of the project to its production phase. As a result, during the three months ended March 31, 2023, the Company recognized development services revenues and related development costs that had been previously deferred, in the amounts of $ 106 7 |
SCHEDULE OF DISAGGREGATION OF_2
SCHEDULE OF DISAGGREGATION OF REVENUE (Details) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Revenues from a Fortune 500 multinational healthcare corporation | $ 303 | $ 2 |
Estimated useful life | 7 years | |
Service [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Revenues from a Fortune 500 multinational healthcare corporation | $ 106 | |
Product [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Revenues from a Fortune 500 multinational healthcare corporation | $ 182 |
SCHEDULE OF CONTRACT FULFILLMEN
SCHEDULE OF CONTRACT FULFILLMENT ASSETS AND CONTRACT LIABILITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Contract fulfillment assets | $ 1,435 | $ 1,495 |
Contract liabilities | 3,416 | 3,644 |
Balance at beginning of year | 1,495 | 1,675 |
Contract costs recognized during the period | (60) | (180) |
Balance at end of year | 1,435 | 1,495 |
Balance at beginning of year | 3,644 | 2,420 |
Deferred revenue relating to new sales | 1,613 | |
Revenue recognized during the year | (228) | (389) |
Balance at end of year | $ 3,416 | $ 3,644 |
REVENUES (Details Narrative)
REVENUES (Details Narrative) $ in Millions | Mar. 31, 2023 USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 3.4 |
SCHEDULE OF INVENTORY (Details)
SCHEDULE OF INVENTORY (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 258 | $ 438 |
Work in progress | 300 | 148 |
Finished goods | 135 | 44 |
Inventory Net | $ 693 | $ 630 |
INVENTORY (Details Narrative)
INVENTORY (Details Narrative) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Inventory Disclosure [Abstract] | |
Inventory impairment | $ 0 |
SCHEDULE OF BALANCES WITH RELAT
SCHEDULE OF BALANCES WITH RELATED PARTIES (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||
Related parties | $ 8 | $ 58 |
Other Liability, Current, Related and Nonrelated Party Status [Extensible Enumeration] | us-gaap:RelatedPartyMember | us-gaap:RelatedPartyMember |
Directors [Member] | ||
Related Party Transaction [Line Items] | ||
Related parties | $ 48 | |
Smartec R and D Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
Related parties | $ 8 | $ 10 |
RELATED PARTIES (Details Narrat
RELATED PARTIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Related Party Transactions [Abstract] | ||
Compensation expense | $ 29 | $ 25 |