ODYSIGHT.AI INC. Readers are advised to review the following discussion and analysis of our
financial condition and results of operations together with our consolidated
financial statements and related notes thereto included elsewhere in this
Quarterly Report on Form 10-Q and the consolidated financial statements and
related notes thereto in our Annual Report on Form 10-K for the year ended
Overview
The Company's primary business activities during last few months were the
completion of R&D in connection with a customer-specific project and the
transition to the production stage with respect to a contract with a Fortune 500
Other major activities were the following:
- expanding marketing activities, including the recruitment of a Director of
Business Development in the US, and launching a multi-platform digital
marketing campaign;
- extensive activity in connection with the Company's IP, including submissions
of new patent applications as well as maintenance, defense, and
commercialization efforts of existing patents;
- increased operation expenses in order to improve the current Company's R&D
capabilities;
- increase in research and development activities, including the development of
new products and the improvement of existing technology, and the examination
of additional applications for our micro ScoutCam™ portfolio outside of the
medical, defense and aerospace fields, including sectors such as, inter alia,
automotive, industrial non-destructing-testing industries, and predictive
maintenance (i.e. Industry 4.0) based on Internet of Things (IoT); and
- investment in capital expenses to provide the necessary facilities, IT, and
lab tools for our newly recruited employees and to upgrade the Company's
production and quality control capabilities.
Comparison of the nine months ended
The following table summarizes our results of operations for the nine months
period ended
Nine months ended September 30,
2021 2020 % Change
Revenues 321,000 86,000 273 %
Cost of Revenues 821,000 434,000 89 %
Gross Loss (500,000 ) (348,000 ) 44 %
Research and development expenses 1,350,000 514,000 163 %
Sales and marketing expense 472,000 302,000 56 %
General and administrative expenses 3,931,000 2,309,000 70 %
Other income 3,000 - -
Operating Loss (6,250,000 ) (3,473,000 ) 80 %
- 20 -
Revenues
For the nine months ended
The increase in revenues was primarily due to revenues from A.M. Surgical. Total
revenues recorded from A.M. Surgical during the nine months ended
Cost of Revenues
Cost of revenues for the nine months ended
Gross Loss
Gross loss for the nine months ended
Research and Development Expenses
Research and development expenses for the nine months ended
We expect that our research and development expenses will increase as we continue to develop our products and service and recruit additional research and development employees to the I4.0 domain.
- 21 - Sales and Marketing Expenses
Sales and marketing expenses for the nine months ended
We expect that our selling and marketing expenses will increase as we continue to increase our selling and marketing efforts.
General and Administrative Expenses
General and Administrative expenses for the nine months ended
? an increase of$616,000 in IP expenses due to maintenance, defense, and commercialization efforts of existing patents; ? the provision of$229,000 due to VAT audit as described in Note 9 of our interim condensed financial statements as ofSeptember 30, 2021 ; ? an increase of$151,000 in share based compensation due to new option grants as described in Note 4 of our interim condensed financial statements as ofSeptember 30, 2021 ; ? an increase in in payroll expenses due to the hiring of additional employees including a new CEO, controller and the shift in the position of the CFO from part-time to full-time; ? an increase in professional services expenses due to the hiring of a financial consultant, HR consultant, the appointment of new directors and additional hires; Operating loss
We incurred an operating loss of
Cash Flows
The following table sets forth the significant sources and uses of cash for the periods set forth below (in dollars):
Nine month ended September 30,
2021 2020
Cash used in Operating Activity (4,704,000 ) (2,710,000 )
Cash used in Investing Activity (483,000 ) (249,000 )
Cash provided by Financing Activity 21,527,000 2,777,000
- 22 - Operating Activities
For the nine months ended
Investing Activities
For the nine months ended
Financing Activities
For the nine months ended
Comparison of the three months ended
The following table summarizes our results of operations for the three months
period ended
Three months ended September 30,
2021 2020 % Change
Revenues 23,000 12,000 92 %
Cost of Revenues 211,000 153,000 38 %
Gross Loss (188,000 ) (141,000 ) 33 %
Research and development expenses 596,000 144,000 314 %
Sales and marketing expense 179,000 114,000 57 %
General and administrative expenses 1,603,000 629,000 155 %
Other income 3,000 - %
Operating Loss (2,563,000 ) (1,028,000 ) 149 %
Revenues
For the three months ended
Cost of Revenues
Cost of revenues for the three months ended
Gross Loss
Gross loss for the three months ended
- 23 -
Research and Development Expenses
Research and development expenses for the three months ended
We expect that our research and development expenses will increase as we continue to develop our products and service, and recruit additional research and development employees.
Sales and Marketing Expenses
Sales and marketing expenses for the three months ended
General and Administrative Expenses
General and Administrative expenses for the three months ended
? an increase in in payroll expenses due to the hiring of additional employees
including a new CEO, controller and the shift in the position of the CFO from
part-time to full-time;
? an increase of $418,000 in share based compensation due to new option grants
as described in Note 4 of our interim condensed financial statements as of
September 30, 2021 ;
? the provision of $229,000 due to VAT audit as described in Note 9 of our
interim condensed financial statements as of September 30, 2021 .
? an increase in IP expenses due to maintenance, defense, and commercialization
efforts of existing patents;
? an increase in professional services expenses due to the hiring of a financial
consultant, HR consultant, the appointment of new directors and additional
hires;
Operating loss
We incurred an operating loss of
Cash Flows
The following table sets forth the significant sources and uses of cash for the periods set forth below (in dollars):
Three month ended September 30,
2021 2020
Cash used in Operating Activity (1,786,000 ) (433,000 )
Cash used in Investing Activity (177,000 ) (28,000 )
Cash used in Financing Activity (95,000 ) -
- 24 -
Operating Activities
For the three months ended
Investing Activities
For the three months ended
Future Funding Requirements
The Company believes that it will require additional financing in order to provide the capital it needs to achieve its growth targets.
Liquidity and Capital Resources
We generated liquidity primarily from fund raising and warrant exercises as
described in Note 4 of our interim condensed financial statements as of
As of
As of
Since our incorporation through
Off-Balance Sheet Arrangements
None.
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