10-K/A - ODYS - Equibles

UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

Washington,D.C. 20549

AmendmentNo. 1

FORM10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended: December 31, 2019

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 333-188920

SCOUTCAMINC.

(Exact name of registrant as specified in its charter)

Nevada	47-4257143
State<br> or other jurisdiction of<br><br> <br>incorporation<br> or organization	(I.R.S.<br> Employer<br><br> <br>Identification<br> No.)

Suite7A, Industrial Park, P.O. Box 3030

Omer,Israel 8496500

(Address of principal executive offices) (Zip Code)

Tel:+972 72 260-2200

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act: None

Title<br> of each class	Trading<br> Symbol(s)	Name<br> of each exchange on which registered
N/A	N/A	N/A

Securities registered pursuant to Section 12(g) of the Act: None

N/A

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large<br> accelerated filer	[ ]	Accelerated<br> filer	[ ]
Non-accelerated<br> filer	[X]	Smaller<br> reporting company	[X]
		Emerging<br> growth company	[ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X]

There was no trading market for the registrant’s common stock as of June 30, 2019, the last business day of the registrant’s most recently completed second fiscal quarter. Therefore, there was no aggregate market value of the voting and non-voting common equity as of such date.

As of December 31, 2019, there were 26,884,921 shares of the registrant’s common stock outstanding.

EXPLANATORYNOTE

On March 16, 2020, ScoutCam Inc. (the “Company”) filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the “Original Form 10-K”). This Amendment No. 1 (the “Amendment”) amends the Original Form 10-K solely to correct a typographical error in the audit report of our independent accounting firm, Kesselman & Kesselman, a member of PricwaterhouseCoopers International Limited. The audit report included in the Original Form 10-K identified the report date as March 15, 2020 whereas the appropriate date is March 16, 2020. A new audit report with the correction is filed hereto.

This Amendment speaks as of the original filing date and does not reflect events occurring after the filing of the Original Form 10-K. No revisions are being made to the Company’s financial statements or any other disclosure contained in the Original Form 10-K. This Amendment does not otherwise update any exhibits as originally filed or previously amended.

In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), new certifications by the Company’s principal executive officer and principal financial officer are filed herewith as exhibits to this Amendment pursuant to Rule 13a-14(a) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

CONSOLIDATED FINANCIAL STATEMENTS

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

TABLE OF CONTENTS


Consolidated<br> Financial Statements – in US Dollars () in thousands
Consolidated<br> Balance Sheets
Consolidated<br> Statements of Operations
Consolidated<br> Statements of Changes in Shareholders’ Equity (Capital Deficiency)
Consolidated<br> Statements of Cash Flows
Notes<br> to the Consolidated Financial Statements

All values are in US Dollars.

| F-1 |

| --- |

Reportof Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of ScoutCam Inc.

Opinionon the Financial Statements

We have audited the accompanying consolidated balance sheets of ScoutCam Inc. and its subsidiary (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of operations, of changes in shareholders’ equity (deficit) and of cash flows for the years then ended, including 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, 2019 and 2018, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

SubstantialDoubt about the Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1(b) to the consolidated financial statements, the Company has suffered recurring losses from operations and cash outflows from operating activities that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1(b). The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basisfor Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Kesselman & Kesselman
Certified<br> Public Accountants (Isr.)
A<br> member firm of PricewaterhouseCoopers International Limited

Tel-Aviv, Israel

March 16, 2020

We have served as the Company’s auditor since 2019.

| F-2 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

CONSOLIDATED BALANCE SHEETS


		2018

Assets
CURRENT ASSETS:
Cash and cash equivalents			-
Accounts receivable			90
Inventory			81
Parent Company			-
Other current assets			62
Total current assets			233
NON-CURRENT ASSETS:
Property and equipment, net			13
Operating lease right-of-use assets			-
Severance pay asset			270
Total non-current assets			283
TOTAL ASSETS			516
Liabilities and shareholders’ equity (capital deficiency)
CURRENT LIABILITIES :
Accounts payable			19
Contract liabilities			-
Operating lease liabilities - short term			-
Accrued compensation expenses			131
Loan from Parent company			-
Other accrued expenses			32
Total current liabilities			182
NON-CURRENT LIABILITIES:
Contract liabilities			200
Operating lease liabilities - long term			-
Liability for severance pay			252
Total non-current liabilities			452
TOTAL LIABILITIES			634
SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY):
Ordinary shares Common stock, 0.001 par value; 75,000,000 shares authorized, 26,884,921 and<br> 16,130,952* shares issued and outstanding at December 31, 2019 and 2018, respectively			16
Additional paid-in capital			(16	)
Parent company deficit			(118	)
Accumulated deficit	)		-
TOTAL SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY)			(118	)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (CAPITAL<br> DEFICIENCY)			516

All values are in US Dollars.

* Please refer to note 3.

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

| F-3 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS


		2018

REVENUES (*):
PRODUCTS			174
SERVICES			217
			391
COST OF REVENUES:
PRODUCTS			104
SERVICES			117
			221
GROSS PROFIT (LOSS)	)		170
RESEARCH AND DEVELOPMENT EXPENSES			183
SALES AND MARKETING EXPENSES			270
GENERAL AND ADMINISTRATIVE EXPENSES			240
OPERATING LOSS	)		(523	)
FINANCING EXPENSES, NET	)		**
LOSS BEFORE TAXES ON INCOME	)		(523	)
TAXES ON INCOME	)		(1	)
NET LOSS	)		(524	)
Net loss per Ordinary share (basic and diluted, in )	)		(0.03	)
Weighted average Ordinary shares (basic and diluted, in thousands)			16,131

All values are in US Dollars.

*	As<br> for revenues related to transaction with the Parent Company – see Note 11(b)
**	Less<br> than 1 thousand

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

| F-4 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY)

	Ordinary<br><br> <br>shares				****		****		****		****
	Shares in<br><br> <br>thousands		in thousands								****
Balance at January 1, 2019		16,131		(16	)	(118	)	-		(118	)
Net<br> transfer from Parent company						514				514
Net<br> loss						(189	)	(1,640	)	(1,829	)
Consummation<br> of the Carve-out				207		(207	)			-
Capital<br> contribution from Parent company				720						720
Sale<br> of assets to Parent company				168						168
Effect<br> of reverse recapitalization		10,754		3,029						3,040
Share<br> based compensation				27						27
Balance at December 31, 2019		26,885		4,135		-		(1,640	)	2,522

All values are in US Dollars.

	Ordinary <br>shares
	Shares in<br> <br>thousands		in thousands
Balance at January 1, 2018		16,131		(16	)	(117	)	(117	)
Net transfer from Parent company						523		523
Net loss						(524	)	(524	)
Balance at December 31, 2018		16,131		(16	)	(118	)	(118	)

All values are in US Dollars.

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

| F-5 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year ended December 31,
	2019		2018
	in thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		)		(524	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation				5
Share based compensation				25
Loss from exchange differences on cash and cash equivalents
Other non-cash items		)		1
CHANGES IN OPERATING ASSET AND LIABILITY ITEMS:
Accounts receivable				(85	)
Increase in inventory		)		(25	)
Other current assets		)		(62	)
Account payables				-
Contract liability				192
Accrued compensation expenses				(13	)
Parent company		)		-
Other accrued expenses				32
Net cash flows used in operating activities		)		(454	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		)
Change in severance pay asset		)		4
Net cash flows provided by (used in) investing activities		)		4
CASH FLOWS FROM FINANCING ACTIVITIES:
Transfer from Parent company				450
Sale of assets to Parent company				-
Capital contribution from Parent company				-
Loan from Parent company				-
Cash obtained in connection with Recapitalization Transaction				-
Net cash flows provided by financing activities				450
INCREASE IN CASH AND CASH EQUIVALENTS				-
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF<br> YEAR				-
LOSSES FROM EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS		)		-
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF YEAR				-
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Unpaid Recapitalization Transaction costs				-

All values are in US Dollars.

SUPPLEMENTALINFORMATION FOR CASH FLOW:

	As of<br><br> <br>December 30, 2019
Assets acquired (liabilities assumed):
Current<br> assets excluding cash and cash equivalents	$	-
Current<br> liabilities		(73	)
Recapitalization<br> Transaction costs		(89	)
Reverse<br> recapitalization effect on equity		(3,040	)
Cash obtained in connection with Recapitalization Transaction	$	3,202

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

| F-6 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE1 – GENERAL:

ScoutCam Inc. (the “Company”), formally known as Intellisense Solutions Inc., was incorporated under the laws of the State of Nevada on March 22, 2013 under the name Intellisense Solutions Inc., or Intellisense. The Company was initially engaged in the business of developing web portals to allow companies and individuals to engage in the purchase and sale of vegetarian food products over the Internet. However, the Company was unable to execute it original business plan, develop significant operations or achieve commercial sales. Prior to the closing of the Securities Exchange Agreement (as defined below), the Company was a “shell company”. ScoutCam Ltd., or ScoutCam, was formed in the State of Israel on January 3, 2019 as a wholly-owned subsidiary of Medigus Ltd. (the “Parent Company”, “Medigus”), an Israeli company traded both on the Nasdaq Capital Market and the Tel Aviv Stock Exchange, and commenced operations on March 1, 2019. Upon incorporation, ScoutCam issued to Medigus 1,000,000 Ordinary shares with no par value. On March 2019, ScoutCam issued to Medigus an additional 1,000,000 Ordinary shares with no par value. ScoutCam was incorporated as part of a reorganization of Medigus, which was designed to distinguish ScoutCam’s miniaturized imaging business, or the micro ScoutCam™ portfolio, from Medigus’s other operations and to enable Medigus to form a separate business unit with dedicated resources focused on the promotion of such technology. In December 2019, Medigus and ScoutCam consummated a certain Amended and Restated Asset Transfer Agreement, under which Medigus transferred and assigned certain assets and intellectual property rights related to its miniaturized imaging business to ScoutCam. On September 16, 2019, the Company entered into a Securities Exchange Agreement (the “Exchange Agreement”), with Medigus, pursuant to which Medigus assigned, transferred and delivered 100% of its holdings in ScoutCam to the Company, in exchange for consideration consisting of shares of the Company’s common stock representing 60% of the issued and outstanding share capital of the Company immediately upon the closing of the Exchange Agreement (the “Closing”). The Exchange Agreement was conditioned on certain obligations by the respective parties, including, but not limited to, that the Company will have at least USD 3 million in cash on hand upon Closing, and that the Company will bear the costs and expenses in connection with the execution of the Exchange Agreement. In accordance with said obligations, the Company undertook to secure at least USD 3 million in funding prior to the Closing, based on a pre-money valuation of USD 10 million of the Company on a post-Closing basis. In addition, the Exchange Agreement provides that if ScoutCam achieves an aggregated amount of USD 33 million in sales within the first three years immediately after the Closing, the Company will issue to Medigus additional shares of Company’s common stock representing 10% of the Company’s issued and outstanding share capital as reflected on the date of the Closing. The Closing occurred on December 30, 2019 (the “Closing Date”). On December 31, 2019, Intellisense filed with the Nevada Secretary of State a Certificate of Amendment to the Registrant’s Articles of Incorporation to change its name from “Intellisense Solutions Inc.” to “ScoutCam Inc.”, effective December 31, 2019. Thereafter, on January 23, 2019, FINRA approved the Company’s name change and its trading symbol was changed from INLL to SCTC on the OTC Markets, Pink Tier. The Company’s Common Stock is quoted on the OTC Pink under the symbol “SCTC”. There is currently no trading market for Company’s Common Stock and there is no assurance that a regular trading market will ever develop. Although the transaction resulted in ScoutCam becoming a wholly owned subsidiary of the Company, the transaction constitutes a reverse recapitalization as the shareholders of ScoutCam own a substantial majority of the outstanding common shares of the Company and taking into account that prior to the Closing Date the Company was considered as a shell corporation. Accordingly, ScoutCam is considered accounting acquirer of the merged company.

| F-7 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE1 – GENERAL (continued):

ScoutCam has developed a range of micro CMOS (complementary metal-oxide semiconductor) and CCD (charge-coupled device) video cameras, including micro ScoutCam™ 1.2. These innovative cameras are suitable for both medical and industrial applications. Based on its proprietary technology, the Company designs and manufactures endoscopy and micro camera systems for partner companies.

During the year ended December 31, 2019, the Company incurred a loss of USD 1,829 thousand and negative cash flows from operating activities of approximately USD 1,799 thousand. Based on the projected cash flows, the Company’s Management is of the opinion that without further fundraising it will not have sufficient resources to enable it to continue its operating activities including the development, manufacturing and marketing of its products within one year after the issuance date of these consolidated financial statements. As a result, there is a substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance date of these financial statements.

Management’s plans include continuing commercialization of the Company’s products and securing sufficient financing through the sale of additional equity securities, debt or capital inflows from strategic partnerships and other opportunities. There are no assurances however, that the Company will be successful in obtaining the level of financing needed for its operations. If the Company is unsuccessful in commercializing its products and securing sufficient financing, it may need to reduce activities, curtail or even cease operations.

These consolidated financial statements have been prepared assuming the Company will continue as a going concern, which assumes the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Accordingly, the consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE2 – SIGNIFICANT ACCOUNTING POLICIES:

a.	Basis of preparation:

The Exchange Agreement is being treated as a reverse recapitalization of Scoutcam Ltd., for financial accounting and reporting purposes. As such, ScoutCam Ltd. is treated as the acquirer for accounting and financial reporting purposes while the Company is treated as the acquired entity for accounting and financial reporting purposes. As a result, the comparative figures that are reflected in the Company’s financial statements are those of ScoutCam and from the Closing Date, the Company’s assets, liabilities and results of operations are consolidated with the assets, liabilities and results of operations of ScoutCam.

The consolidated financial statements reflect the group’s financial position, results of operations, changes in shareholders equity (capital deficiency) and cash flows in accordance with generally accepted accounting principles in the Unites States (“U.S. GAAP”).

| F-8 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE2 – SIGNIFICANT ACCOUNTING POLICIES (continued):

The accompanying comparative consolidated financial statements include the historical accounts of ScoutCam as a “Carve-out Business”, a division of Medigus. Throughout the comparative periods included in these Financial Statements, the Carve-out Business operated as part of Medigus. Separate financial statements have not historically been prepared for the Carve-out Business.

These comparative carve-out financial statements have been prepared on a standalone basis and are derived from Medigus’s consolidated financial statements and accounting records. The carve-out comparative financial statements reflect ScoutCam’s financial position, results of operations, changes in net parent deficit and cash flows in accordance with U.S. GAAP.

The financial position, results of operations, changes in net parent deficit, and cash flows of the Carve-out Business may not be indicative of its results had it been a separate stand-alone entity during the comparative periods presented.

The comparative carve-out financial statements of the Company include expenses which were allocated from Medigus for certain functions, including general corporate expenses related to corporate strategy, procurement, Information Technology (“IT”), Human Resources (“HR”) and legal. These allocation have been made on the basis of direct usage when identifiable, with the remainder allocated on the basis of headcount. Management believes the expense allocation methodology and results are reasonable and consistently applied for all comparative periods presented. However, these allocations may not be indicative of the actual expenses that would have been incurred by an independent company or of the costs to be incurred in the future.

The carve-out comparative financial statements include assets and liabilities specifically attributable to the Carve-out Business. Medigus uses a centralized approach for managing cash and financing operations. Accordingly, a substantial portion of the cash balances are transferred to Medigus’ cash management accounts regularly and therefore are not included in the financial statements. Transfers of cash between Carve-out business and Medigus are included within “Net transfers from Parent company” on the Statements of Cash Flows and the Statements of changes in shareholder’s equity (capital deficiency).

As the carve-out comparative financial statements have been prepared on a carve-out basis, the amounts reflected in Parent Company deficit in the comparative statement of changes in shareholder’s equity (capital deficiency) refer to net loss for the period attributed to ScoutCam in addition to transactions between Medigus and ScoutCam.

The accounting policies set out below have, unless otherwise stated, been applied consistently.

b.	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, as well as in estimates used in applying the revenue recognition policy. Actual results may differ from those estimates.

| F-9 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE2 – SIGNIFICANT ACCOUNTING POLICIES (continued):

c.	Functional currency

A majority of ScoutCam’s revenues are generated in U.S. dollars. The substantial majority of ScoutCam Ltd.’s costs are incurred in U.S. dollars and New Israeli Shekels (“NIS”). ScoutCam Ltd.’s management believes that the U.S. dollar is the currency of the primary economic environment in which ScoutCam Ltd. operates. Thus, the functional currency of ScoutCam Ltd.’s is the U.S. dollar.

Transactions and balances originally denominated in U.S. dollars are presented at their original amounts. Balances in non-dollar currencies are translated into U.S. dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-U.S. dollar transactions and other items in the statements of operations (indicated below), the following exchange rates are used: (i) for transactions exchange rates at transaction dates and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization) historical exchange rates. Currency transaction gains and losses are presented in financial income or expenses, as appropriate.

d.	Cash and Cash Equivalents

The Company considers as cash equivalents all short-term, highly liquid investments, which include short-term bank deposits with original maturities of three months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash.

e.	Accounts receivable

Accounts receivable are presented in the Company’s consolidated balance sheet net of allowance for doubtful accounts. The Company estimates the collectibility of its accounts receivable balances and adjusts its allowance for doubtful accounts accordingly.

When revenue recognition criteria are not met for a sale transaction that has been billed, the Company does not recognize deferred revenues or the related account receivable.

As of December 31, 2019, no allowance for doubtful accounts was recorded.

f.	Property and equipment

Property and equipment is stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated on a straight-line basis over the estimated useful lives:

Machinery and equipment – 6-10 years.

| F-10 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE2 – SIGNIFICANT ACCOUNTING POLICIES (continued):

g.	Severance pay

Israeli 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 Company’s employees in Israel are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, made in their name with insurance companies. Payments under Section 14 relieve the Company from any future severance payment obligation with respect to those employees and, as such, the Company may only utilize the insurance policies for the purpose of disbursement of severance pay. As a result, the Company does not recognize an asset nor liability for these employees.

The asset and the liability for severance pay presented in the balance sheet reflects employees that began employment prior to Section 14.

The severance pay liability of the Company to its employees that began employment prior to Section 14, based upon the number of years of service and the latest monthly salary and is partly covered by regular deposits with recognized pension funds and deposits with severance pay funds. Under labor agreements, these deposits are in the employees’ names and, subject to certain limitations, are the property of the employees. The liability for employee rights upon retirement covers the severance pay liability of the Company in accordance with labor agreements in force and based on salary components which, in the opinion of management, create entitlement to severance pay. The Company records the obligation as if it were payable at each balance sheet date on an undiscounted basis. The Company may only make withdrawals for the purpose of paying severance.

h.	Stock-Based Compensation

The Company measures and recognizes compensation expense for its equity classified stock-based awards, including stock-based option awards exercisable into shares of common stock of the Parent company under its plan based on estimated fair values on the grant date. The Company calculates the fair value of stock-based option awards on the grant date using the Black-Scholes option pricing model. The option-pricing model requires a number of assumptions, of which the most significant are the stock price volatility and the expected option term. For the years ended December 31, 2019, and 2018, the volatility was based on the historical stock volatility of the Parent Company. 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. 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 fair value of stock-based 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, net of estimated forfeitures.

| F-11 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE2 – SIGNIFICANT ACCOUNTING POLICIES (continued):

i.	Inventories

Inventories include raw materials, inventory in process and finished products and are valued at the lower of cost or net realizable value.

The cost is determined on the basis of “first in-first out” basis. Cost of purchased raw materials and inventory in process includes costs of design, raw materials, direct labor, other direct costs and fixed production overheads. Materials and other supplies held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

The Company regularly evaluates its ability to realize the value of inventory based on a combination of factors including the following: forecasted sales or usage, estimated current and future market values.

j.	Revenue recognition
a)	Revenue<br> measurement
---	---

Commencing January 1, 2018, the Company’s revenues are measured according to the 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 in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties, such as sales taxes. Revenues are presented net of VAT.

Until December 31, 2017 revenues were measured in accordance with ASC 605, “Revenue recognition”. The implementation of ASC 606 did not have a material effect on the consolidated financial statements of the Company as the Company’s accounting for revenue recognition remains substantially identical.

b)	Revenue<br> recognition

The Company recognizes revenue when a customer obtains control over promised goods or services. For each performance obligation the Company determines at contract inception whether it satisfies the performance obligation over time or satisfies the performance obligation at a point in time.

Performance obligations are satisfied over time if one of the following criteria is met:

(a) the customer simultaneously receives and consumes the benefits provided by the Company’s performance; (b) the Company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or (c) the Company’s performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance completed to date.

If a performance obligation is not satisfied over time, a Company satisfies the performance obligation at a point in time.

| F-12 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE2 – SIGNIFICANT ACCOUNTING POLICIES (continued):

The transaction price is allocated to each distinct performance obligations on a relative standalone selling price (“SSP”) basis and revenue is recognized for each performance obligation when control has passed. In most cases, the Company is able to establish SSP based on the observable prices of services sold separately in comparable circumstances to similar customers and for products based on the Company’s best estimates of the price at which the Company would have sold the product regularly on a stand-alone basis. The Company reassesses the SSP on a periodic basis or when facts and circumstances change.

ProductRevenue

Revenues from product sales are recognized when the customer obtains control of the Company’s product, typically upon shipment to the customer. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues.

ServiceRevenue

The Company also generates revenues from development services. Revenue from development services is recognized over the period of the applicable service contract. There are no long-term payment terms or significant financing components of the Company’s contracts.

The Company’s contract payment terms for product and services vary by customer. The Company assesses collectibility based on several factors, including collection history.

k.	Cost of revenues

Cost of revenue consists of products purchased from sub-contractors, raw materials for in-house assembly line, shipping and handling costs to customers, salary, employee-related expenses, depreciation and overhead expenses.

l.	Research and development costs

Research and development costs are expensed as incurred and includes salaries and employee-related expenses, overhead expenses, material and third-party contractor’s charges.

m.	Income taxes

Income taxes are accounted for using the asset and liability approach under ASC-740, “Income Taxes” (“ASC-740”). The asset and liability approach require the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns.

The measurement of current and deferred tax liabilities and assets is based on provisions of the relevant tax law. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized.

ASC-740 also clarifies the accounting and reporting for uncertainties in income tax. ASC-740 prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns.

| F-13 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE2 – SIGNIFICANT ACCOUNTING POLICIES (continued):

n.	Legal contingencies

From time to time, the Company becomes involved in legal proceedings or is 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 it can reasonably estimate the amount of any such loss. The Company is currently not a party to any material legal or administrative proceedings and, is not aware of any material pending or threatened material legal or administrative proceedings against the Company.

o.	Loss per share

Basic loss per share is computed by dividing net loss attributable to ordinary stockholders of the Company, by the weighted average number of shares of common stock as described below.

In computing the Company’s diluted earnings per share, the numerator used in the basic earnings per share computation is adjusted for the dilutive effect, if any, of the Company’s potential shares of common stock. The denominator for diluted earnings per share is a computation of the weighted-average number of ordinary shares and the potential dilutive shares of common stock outstanding during the period.

The loss per share information in these consolidated financial statements is reflected and calculated as if the Company had existed since January 1, 2018. Accordingly, loss per share for all periods was calculated based on the number of shares retroactively adjusted for the exchange ratio determined in the reverse recapitalization (see also note 3).

p.	Leases

The Company adopted the new accounting standard Accounting Standards Codification 842 “Leases,” and all the related amendments, on January 1, 2019 and used the standard’s effective date as the Company’s date of initial application. Consequently, financial information was not updated and the disclosures required under the new standard are not provided for dates and periods before January 1, 2019. The new standard also provides practical expedients for an entity’s ongoing accounting. The adoption of this standard did not have a material effect on the Company’s financial statements. On January 1, 2019, the Company recognized ROU assets of approximately USD 19 thousand and lease liabilities of approximately USD 19 thousand for its operating leases of real estate and vehicles. The Company has elected the short-term lease exception for leases with a term of 12 months or less. As part of this election it will not recognize right-of-use assets and lease liabilities on the balance sheet for leases with terms less than 12 months. See also note 12.

q.	Recently Issued Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13 “Financial Instruments-Credit Losses-Measurement of Credit Losses on Financial Instruments” that supersedes the existing impairment model for most financial assets to a model that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 requires an entity to recognize an impairment allowance equal to its current estimate of all contractual cash flows the entity does not expect to collect. ASU 2016-13 also requires that credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses. The guidance will be effective for Smaller Reporting Companies (SRCs, as defined by the SEC) for the fiscal year beginning on January 1, 2023, including interim periods within that year. We are currently evaluating this guidance to determine the impact it may have on our consolidated financial statements.

| F-14 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE3 – REVERSE RECAPITALIZATION

On December 30, 2019, Intellisense and Medigus completed the Exchange Agreement accounted for as a reverse recapitalization transaction. Pursuant to the Exchange Agreement, Intellisense issued to Medigus 16,130,952 share. Upon such issuance, ScoutCam Ltd. became a wholly-owned subsidiary of Intellisense On December 31, 2019, Intellisense Solutions Inc. changed its name to ScoutCam Inc.

Immediately prior to the Closing Date the Company’s outstanding common stock was comprised of 3,927,346 shares of common stock $0.001 par value, of which 1,352,666 shares were issued immediately prior to the Closing Date as part of the conversion of promissory notes to related parties and the exercise of warrants by related parties, employees and service providers.

Also on the Closing Date, 3,413,312 units, each comprised of two shares of common stock par value USD 0.001 per share, one Warrant A (as defined below) and two Warrants B (as defined below), were issued to investors as part of the financing transaction that the Company was obligated to secure prior to the closing. The immediate gross proceeds from the issuance of the units amounted to approximately USD 3.3 million.

Each Warrant A is exercisable into one share of common stock of the Company at an exercise price of USD 0.595 per share during the12 month period following the allotment. Each Warrant B is exercisable into one share of common stock of the Company at an exercise price of USD 0.893 per share during the 18 month period following the allotment.

While ScoutCam Inc. was the legal acquirer, ScoutCam Ltd. was treated as the acquiring company for accounting purposes as the Exchange Agreement was accounted for as a reverse recapitalization which is equivalent to the issuance of 10,753,969 shares by ScoutCam Ltd, for the net monetary assets of ScoutCam Inc. As a result, the financial statements of the Company prior to the Closing Date are the historical financial statements of ScoutCam Ltd. The financial statements of the Company after the Closing Date reflect the results of the operations of ScoutCam Ltd. and ScoutCam Inc. on a combined basis. The net acquired assets of the Company as of the Closing Date was $3,040 thousands. There were no fair value adjustments necessary to perform as the carrying values of the net acquired assets approximated fair value. Further, given the nature of the operations of ScoutCam Inc. prior to the Closing Date, there were no intangible assets, including goodwill, established as a result of the Exchange Agreement.

Under the Exchange Agreement, the number of shares of common stock and USD amount for common stock is based on the nominal value and the shares of common stock issued by ScoutCam Inc. (reflecting the legal structure of ScoutCam Inc. as the legal acquirer) on the Closing Date plus shares of common stock issued by ScoutCam Inc. as part of the Exchange Agreement as described above. Historical stockholders’ equity reflects the accounting acquirer, except for share number and USD amount adjusted for the shares exchange ratio pursuant to the Exchange Agreement amounting to 8.065.

NOTE4 – INVENTORY:

Composed as follows:

	December 31,
	2019	2018
	in thousands
Raw materials and supplies			38
Work in progress			43
Finished goods			-
			81

All values are in US Dollars.

During the years ended 2019 and 2018, no impairment occurred.

| F-15 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE5 – PROPERTY AND EQUIPMENT, NET:

Property, plant and equipment, net consisted of the following:

	December<br> 31,				****
	2019	****	2018		****
	in thousands				****
Cost:<br> machinery and equipment				286
Less:<br> accumulated deprecation		)		(273	)
Total<br> property and equipment, net				13

All values are in US Dollars.

Depreciation expenses were USD 6 thousand and USD 5 thousand in the years ended December 31, 2019 and 2018, respectively.

NOTE6 – OTHER ACCRUED EXPENSES:

	December 31,
	2019	2018
	in thousands
Unpaid recapitalization transaction costs			-
IRS (see note 7b)			-
Accrued expenses			32
			32

All values are in US Dollars.

NOTE7 – INCOME TAXES:

a.	Basis of taxation

The Company and its subsidiary are taxed under the domestic tax laws of the jurisdiction of incorporation of each entity (United States and Israel).

Income from Israel was taxed at the corporate tax rate of 23%.

ScoutCam Inc. was incorporated in the United States and is subject to the Federal and State tax laws established in the United States.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. The Act reduces the corporate tax rate to 21 percent from 35 percent, among other things.

b.	ScoutCam<br> Inc. did not timely file its tax return for 2013-2014 and therefore the IRS imposed penalties in the amount of USD 60 thousand<br> (approximately $73 thousands including interest).

ScoutCam Inc. has not yet filed tax returns for 2015-2018.

c.	Israel<br> tax loss carryforwards

As of December 31, 2019 the Company has accumulated losses for tax purposes that were generated in Israel. These losses may be carried forward and offset against taxable income in the future for an indefinite period. A full valuation allowance was created against the Company’s deferred tax assets generated in Israel. Management currently believes that it is more likely than not that the deferred taxes generated in Israel will not be realized in the foreseeable future.

| F-16 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE8 – RELATED PARTIES:

On May 30, 2019, ScoutCam Ltd. entered into an intercompany agreement with Medigus (the “Intercompany Agreement”) according to which ScoutCam Ltd. agreed to hire and retain certain services from Medigus. The agreed upon services provided under the Intercompany Agreement included: (1) lease of office space and clean room based on actual space utilized by ScoutCam Ltd. and in shared spaces according to employee ratio; (2) utilities such as electricity water, IT and communication services based on employee ratio; (3) car services, including car rental, gas usage, payment for toll roads based on 100% of expense incurred from a ScoutCam Ltd. employee car; (4) external accountant services at a price of USD 6,000 per annum; (5) directors and officers insurance at a sum of 1/3 of Parent company cost; (6) CFO services at a sum of 50% of Parent company CFO employer cost; (7) every direct expense of ScoutCam Ltd. that is paid by the Parent company in its entirety subject to approval of such direct expenses in advance; and (8) any other mutual expense that is borne by the parties according to the Respective portion of the Mutual Expense.

The total expenses for year ended December 31, 2019 amounted to USD 329 thousand. As of December 31, 2019 the balance with Medigus amounting to USD 73 thousand represents amounts to be utilized against future services.

In addition, ScoutCam Ltd.’s employees provide support services to Medigus.

b.	On<br> June 3, 2019, the Parent Company executed a capital contribution on account of additional paid in capital into ScoutCam Ltd.<br> of an aggregate amount of USD 720 thousand.
c.	On<br> August 27, 2019, the Parent Company provided ScoutCam Ltd. with a line of credit in the aggregate amount of USD 500 thousand<br> and, in exchange, ScoutCam Ltd. agreed to grant the Parent Company a capital note that will bear an annual interest rate of<br> 4%. The repayment of the credit line amount shall be spread over one year in monthly payments beginning January 2020. The<br> said note is presented in the consolidated balance sheet within “Loan from Parent Company”.
d.	On<br> July 31, 2019, ScoutCam Ltd. and Prof. Benad Goldwasser entered into a consulting agreement, whereby Prof. Goldwasser agreed<br> to serve as chairman of the board of directors of ScoutCam Ltd., effective retroactively to March 1, 2019, in consideration<br> for, inter alia, a monthly fee of $10,000 and options representing 5% of our fully-diluted share capital as of the<br> Closing Date.
e.	On<br> September 3, 2019, a certain Asset Transfer Agreement, by and between ScoutCam Ltd. and the Parent Company dated May 28, 2019,<br> became effective. According to the Asset Transfer Agreement the Company transferred certain assets (property and equipment)<br> with a nil carrying amount to the Parent Company in consideration of USD 168 thousand. The assets were then sold to a third<br> party. The excess of the said consideration over the carrying amount was directly recorded to shareholders’ equity.
f.	During<br> December 2019, the Company entered into a consulting agreement with Shrem Zilberman Group Ltd. (the “Consultant”)<br> in the amount of USD 165 thousand (see also note 9b). A director of the Company is related to one of the Consultant’s<br> shareholders.
g.	On<br> February 12, 2020, the Company’s Board of Directors authorized the allotment of options to purchase 2,235,691 shares<br> of Common Stock of the Company to Professor Benad Goldwasser, the Company’s Chairman of the Board, and options to purchase<br> 1,865,346 shares of Common Stock of the Company to certain officers of the Company. Each option is convertible into one share<br> of common stock of the Company of $0.001 par value at an exercise price of $0.29. See also note 13b.

NOTE9 – EQUITY:

As discussed in note 3, the Recapitalization is accounted for as a reverse recapitalization with ScoutCam Inc. as the legal acquirer and ScoutCam Ltd. as the accounting acquirer. Under the Recapitalization, the USD amount for shares of common stock is based on the nominal value and the shares of common stock issued by ScoutCam Inc. (reflecting the legal structure of ScoutCam Inc. as the legal acquirer) on the Recapitalization Date plus shares of common stock issued by the Company as part of the Recapitalization as described above. Historical stockholders’ equity reflects the accounting acquirer’s share number and USD amount adjusted for the exchange ratio determined in the Recapitalization.

| F-17 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE9 – EQUITY (continued):

In December 2019, the Company allotted in a private issuance, a total of 3,413,312 units at a purchase price of USD $0.968 per unit. Each unit was comprised of two shares of common stock par value US$0.001 per share, one Warrant A (defined below) and two Warrants B (defined below). The immediate proceeds (gross) from the issuance of the units amounted to approximately USD 3.3 million.

Each Warrant A is exercisable into one share of common stock of the Company at an exercise price of USD 0.595 per share during the 12 month period following the allotment. Each Warrant B is exercisable into one share of common stock of the Company at an exercise price of USD 0.893 per share during the 18 month period following the allotment.

In addition, the Company’s Consultant (see also note 8f) will be entitled to receive the amount representing 3% of any exercise price of each Warrant A or Warrant B that may be exercised in the future. In the event the total proceeds received as a result of exercise of Warrants will be less than $2 million at the time of their expiration, the Consultant will be required to invest $250,000 in the Company.

NOTE10 – REVENUES:

a.	Disaggregation of Revenues:

The following table present the Company’s revenues disaggregated by revenue type for the years ended December 31, 2019 and 2018:

	Year ended on December 31,
	2019	2018
	in thousands
Products			174
Services			217
			391

All values are in US Dollars.

Revenues from products are recognized at a point of time and revenues from services are recognized over time.

b.	Contract liabilities:

The Company’s contract liabilities as of December 31, 2019 and 2018 were as follows:

	December 31,
	2019		2018
	in thousands
The change in deferred revenues:
Balance at beginning of year				8
Deferred revenue relating to new sales				200
Revenue recognition during the period		)		(8	)
Balance at end of year				200

All values are in US Dollars.

Contract liabilities include advance payments, which are primarily related to advanced billings for development services.

Revenue recognized in 2018 that was included in deferred revenue balance as of January 1, 2018 was USD 8 thousand.

There was no revenue recognized in 2019 that was included in deferred revenue balance as of December 31, 2018.

| F-18 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE10 – REVENUES (continued):

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 December 31, 2019 the total RPO amounted to USD 906 thousand, which the Company expects to recognize during financial year 2020.

NOTE11 – ENTITY WIDE DISCLOSURES:

ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments. The Company manages its business based on one operating segment and derives revenues from sales of products and services developing minimally invasive endosurgical tools and highly innovative imaging solutions.

a.	Revenues by geographical area (based on the location of customers)

The following is a summary of revenues within geographic areas:

	Year<br> ended on <br> December 31,
	2019	2018
	in thousands
United<br> States			300
United<br> Kingdom			24
South<br> Korea			7
Israel			12
Other			48
			391

All values are in US Dollars.

b.	Major customers

Set forth below is a breakdown of Company’s revenue by major customers (major customer –revenues from these customers constituted at least 10% of total revenues in a certain year):

	Year ended on December<br> 31,
	2019	2018
	in thousands
Customer A			134
Customer B			92
Customers C			21
Customer D – Parent company

All values are in US Dollars.

| F-19 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE12 – LEASES

The Company’s leases relate to vehicles leases and to short term lease of Company’s offices.

The components of lease expenses during the periods presented were as follows:

	Year<br> ended<br> December<br> 31, 2019
	in thousands
Operating<br> lease expenses
Short-term<br> lease expenses
Total<br> lease expenses

All values are in US Dollars.

Supplemental cash flow information related to operating leases during the period presented was as follows:

****	Year<br> ended<br> December 31, 2019
	in thousands
Cash<br> paid for amounts included in the measurement of lease liabilities:
Operating<br> cash flows from operating leases
ROU<br> assets obtained in exchange for lease liabilities:
Operating<br> leases

All values are in US Dollars.

Lease term and discount rate related to operating leases as of the period presented were as follows:

****	December<br> 31, 2019	****
	in thousands	****
Weighted-average<br> remaining lease term (in years)
Weighted-average<br> discount rate		%

All values are in US Dollars.

The maturities of lease liabilities under operating leases as of December 31, 2019 are as follows:

	in thousands
2020
2021
2022
Total undiscounted lease payments
Less: Imputed interest		)
Total lease liabilities

All values are in US Dollars.

| F-20 |

| --- |

SCOUTCAMINC. (Formerly known as Intellisense Solutions Inc.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE13 – SUBSEQUENT EVENTS:

a.	On<br> March 3, 2020, the Company allotted in a private issuance a total of 979,754 units at a purchase price of USD $0.968 per unit.

Each unit was comprised of two shares of common stock par value US$0.001 per share, one Warrant A (defined below) and two Warrants B (defined below).

Each Warrant A is exercisable into one share of common stock of the Company at an exercise price of USD 0.595 per share during the 12 month period following the allotment.

Each Warrant B is exercisable into one share of common stock of the Company at an exercise price of USD 0.893 per share during the 18 month period following the allotment.

The immediate proceeds (gross) from the issuance of all securities offered amounted to approximately USD 948 thousands.

b.	In<br> February 2020, the Company’s Board of Directors approved the 2020 Share Incentive Plan (the “Plan”). The<br> Plan initially included a pool of 5,228,007 shares of common stock for grant to Company employees, consultants, directors<br> and other service providers.

The Plan is designed to enable the Company to grant options to purchase ordinary shares 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.

On March 19, 2020 the Company granted 4,367,515 options pursuant to the Plan. Each option is convertible into one share of common stock of the Company of $0.001 par value at the exercise price of $0.29. For a discussion of options granted to related parties, see Note 8g.

On March 15, 2020, the Company’s Board of Directors approved, among other things: (i) an increase to the Company’s option pool pursuant to the Plan by an additional 576,888 shares of Common Stock for future grants to employees, consultants, directors and other service providers of the Company; (ii) a quarterly fee of $4,000 payable to each of the Company’s directors, excluding Professor Benad Goldwasser; and (iii) the allotment of options to purchase 576,888 shares of Common Stock of the Company to each of the Company’s directors, excluding Professor Benad Goldwasser. Each option granted to the Company’s directors is convertible into one share of Common Stock at an exercise price of $0.29.

| F-21 |

| --- |

Item15. exhibits, financial statement schedules

Exhibit<br> No.	Exhibit<br> Description
3.1	Articles of Incorporation (incorporated by reference to Exhibit 3.1 to our Registration Statement on Form S-1 filed with the SEC on May 29, 2013)
3.2	Certificate of Amendment to the Articles of Incorporation (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the SEC on January 2, 2020)
3.3	Bylaws (incorporated by reference to Exhibit 3.2 to our Registration Statement on Form S-1 filed with the SEC on May 29, 2013)
4.1**	Description of the Registrant’s Securities
10.1	Securities Exchange Agreement, dated September 16, 2019, by and between our Company and Medigus Ltd. (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on September 17, 2019)
10.2	Form of Securities Purchase Agreement, dated December 26, 2019, by and among our Company, ScoutCam Ltd., and certain investors listed therein (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the SEC on December 31, 2019)
10.3	Form of Escrow Agreement, dated December 26, 2019, by and among our Company, ScoutCam Ltd., Altshuler Shaham Trusts Ltd., and those certain investors that are a party to the Securities Purchase Agreement dated December 26, 2019 (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed with the SEC on December 31, 2019)
10.4	Form of Warrant A by and between our Company and those certain investors that are a party to the Securities Purchase Agreement dated December 30, 2019 (incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed with the SEC on December 31, 2019)
10.5	Form of Warrant B by and between our Company and those certain investors that are a party to the Securities Purchase Agreement dated December 30, 2019 (incorporated by reference to Exhibit 10.5 to our Current Report on Form 8-K filed with the SEC on December 31, 2019)
10.6	Form of Registration Rights Agreement, dated December 26, 2019, by and among our Company and those certain investors that are a party to the Securities Purchase Agreement dated December 26, 2019 (incorporated by reference to Exhibit 10.6 to our Current Report on Form 8-K filed with the SEC on December 31, 2019)
10.7	Amended and Restated Asset Transfer Agreement, by and between ScoutCam Ltd. and Medigus Ltd., dated December 1, 2019 (incorporated by reference to Exhibit 10.7 to our Current Report on Form 8-K filed with the SEC on December 31, 2019)
10.8	Consulting Agreement by and between ScoutCam Ltd. and Prof. Benad Goldwasser, dated July 31, 2019 (incorporated by reference to Exhibit 10.8 to our Current Report on Form 8-K filed with the SEC on December 31, 2019)
10.9**	Consulting Agreement by and between ScoutCam Ltd. and Shrem Zilberman Group Ltd., dated December 10, 2019
10.10**	2020 Share Incentive Plan
10.11**	Form of Notice of Option Grant and Option Agreement
21.1	Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 to our Current Report on Form 8-K filed with the SEC on December 31, 2019)
31.1*	Section<br> 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer
32.1*	Section<br> 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer
101.INS	XBRL Instance<br> Document
101.SCH	XBRL Taxonomy<br> Extension Schema Document
101.CAL	XBRL Taxonomy<br> Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy<br> Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy<br> Extension Label Linkbase Document
101.PRE	XBRL Taxonomy<br> Extension Presentation Linkbase Document]
*	Filed<br> herewith
---	---
**	Filed previously

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SCOUTCAM INC.
By:	/s/ Yaron Silberman
Name:	Yaron<br> Silberman
Title:	Chief<br> Executive Officer
Date:	May<br> 12, 2020

Exhibit31.1

CERTIFICATIONPURSUANT TO

RULE13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

ASADOPTED PURSUANT TO

SECTION302 OF THE SARBANES-OXLEY ACT OF 2002

I, Yaron Silberman, certify that:

1.	I<br> have reviewed this Annual Report on Form 10-K for the year ended December 31, 2019 of ScoutCam Inc.;
2.	Based<br> on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary<br> to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect<br> to the year end covered by this report;
3.	Based<br> on my knowledge, the financial statements, and other financial information included in this report, fairly present in all<br> material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the year<br> end presented in this report;
4.	The<br> registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and<br> procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined<br> in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.	Designed<br> such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,<br> to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to<br> us by others within those entities, particularly during the year end in which this report is being prepared;
b.	Designed<br> such internal control over financial reporting, or caused such internal control over financial reporting to be designed under<br> our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial<br> statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions<br> about the effectiveness of the disclosure controls and procedures, as of the end of the year end covered by this report based<br> on such evaluation; and
d.	Disclosed<br> in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s<br> most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially<br> affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;<br> and
5.	The<br> registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control<br> over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors<br> (or persons performing the equivalent functions):
a.	All<br> significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which<br> are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial<br> information; and
b.	Any<br> fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s<br> internal control over financial reporting.
Date:<br> May 12, 2020
---
/s/ Yaron Silberman
Yaron<br> Silberman
Chief<br> Executive Officer

Exhibit31.2

CERTIFICATIONPURSUANT TO

RULE13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

ASADOPTED PURSUANT TO

SECTION302 OF THE SARBANES-OXLEY ACT OF 2002

I, Tanya Yosef, certify that:

1.	I<br> have reviewed this Annual Report on Form 10-K for the year ended December 31, 2019, of ScoutCam Inc.;
2.	Based<br> on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary<br> to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect<br> to the year end covered by this report;
3.	Based<br> on my knowledge, the financial statements, and other financial information included in this report, fairly present in all<br> material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the year<br> end presented in this report;
4.	The<br> registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and<br> procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined<br> in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.	Designed<br> such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,<br> to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to<br> us by others within those entities, particularly during the year end in which this report is being prepared;
b.	Designed<br> such internal control over financial reporting, or caused such internal control over financial reporting to be designed under<br> our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial<br> statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions<br> about the effectiveness of the disclosure controls and procedures, as of the end of the year end covered by this report based<br> on such evaluation; and
d.	Disclosed<br> in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s<br> most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially<br> affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;<br> and
5.	The<br> registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control<br> over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors<br> (or persons performing the equivalent functions):
a.	All<br> significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which<br> are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial<br> information; and
b.	Any<br> fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s<br> internal control over financial reporting.
Date:<br> May 12, 2020
---
/s/ Tanya Yosef
Tanya<br> Yosef
Chief<br> Financial Officer

Exhibit32.1

CERTIFICATIONPURSUANT TO

18U.S.C. SECTION 1350,

ASADOPTED PURSUANT TO

SECTION906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of ScoutCam Inc. (the “Company”) on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Yaron Silberman, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)	The<br> Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended;<br> and
(2)	The<br> information contained in the Report fairly presents, in all material respects, the financial condition and results of operations<br> of the Company.
/s/ Yaron Silberman
---
Yaron<br> Silberman
Chief<br> Executive Officer
ScoutCam<br> Inc.
May<br> 12, 2020

Exhibit32.2

CERTIFICATIONPURSUANT TO

18U.S.C. SECTION 1350,

ASADOPTED PURSUANT TO

SECTION906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of ScoutCam Inc. (the “Company”) on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tanya Yosef, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)	The<br> Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended;<br> and
(2)	The<br> information contained in the Report fairly presents, in all material respects, the financial condition and results of operations<br> of the Company.
/s/ Tanya Yosef
---
Tanya<br> Yosef
Chief<br> Financial Officer
ScoutCam<br> Inc.
May<br> 12, 2020