Financial Performance - Revenues for the nine months ended September 30, 2023, were 506,000 for the same period in 2022[21]. - Gross loss decreased to 773,000 in the same period of 2022, reflecting a 27.4% improvement[21]. - Operating loss for the nine months ended September 30, 2023, was 7,675,000 for the same period in 2022, indicating a 14.3% increase in losses[21]. - Net loss for the nine months ended September 30, 2023, was 7,804,000 in the same period of 2022, representing a 3.8% increase[21]. - Revenues for the three months ended September 30, 2023, were 24,000, or 18%, from 1,648,000 for the nine months ended September 30, 2023, up from 877,000 for the nine months ended September 30, 2023, up from 3,225,000, a decrease of 3,262,000 for the same period in 2022[94]. Assets and Cash Flow - Total assets increased to 16,895,000 at the end of 2022, representing a 45.5% growth[15]. - Cash and cash equivalents rose to 10,099,000 at the end of 2022, marking a 57.5% increase[15]. - The company accumulated a deficit of approximately 7,338,000, compared to 3,231,000, or 78.7%[96][98]. - Cash provided by financing activities during the nine months ended September 30, 2023, was 19.5 million, indicating a need for substantial additional funding to support operations and product development[153]. Research and Development - Research and development expenses for the nine months ended September 30, 2023, were 3,023,000 in the same period of 2022, indicating a 36% increase[21]. - The company expects to continue incurring significant research and development costs, necessitating additional funding to sustain operations until profitability is achieved[40]. - The company expects research and development expenses to continue increasing as it expands its focus on I4.0 domain activities[88]. - Research and development expenses for the three months ended September 30, 2023, were 306,000, or 29%, compared to 13,818,000[24]. - Mr. Arkin beneficially owns approximately 55.62% of the Common Stock, which gives him significant control over corporate decisions[198]. - As of September 22, 2023, directors, executive officers, principal stockholders, and affiliated entities own approximately 84.56% of the outstanding voting securities, allowing them to exert substantial influence over company decisions[211]. - Future issuances of Common Stock or other securities may dilute the ownership interests of current stockholders, particularly in connection with capital raising activities and employee retention[210]. Risks and Challenges - The company has not achieved profitability in any full fiscal year since inception, raising concerns about its ability to sustain operations and growth[148]. - The company is reliant on third-party suppliers for most components, which could hinder its ability to meet product demand in a timely and cost-effective manner[163]. - The company faces significant risks from weakened global economic conditions, which could adversely affect its financial performance and operations[159]. - The ongoing effects of the COVID-19 pandemic remain unpredictable and could significantly impact future results and overall financial performance[162]. - The company may struggle to establish effective sales, marketing, and distribution capabilities, which are crucial for commercializing its products[149]. - The company anticipates competition from customers, which could adversely affect its market position and financial results[154]. - The company may not be able to manage its growth effectively, which could impair its business and operational capabilities[154]. - The company is subject to various regulatory risks, including compliance with anti-bribery and anti-corruption laws, which could lead to penalties and other adverse consequences[154]. - The company may face challenges in enforcing its patents, especially in foreign jurisdictions, which could limit its ability to protect its intellectual property[178]. Market and Economic Conditions - The impact of military conflicts, such as the ongoing situation between Russia and Ukraine, may adversely affect financial markets and the global economy[209]. - Sanctions imposed by the United States and other countries in response to geopolitical conflicts could exacerbate market instability[209]. - General market conditions and external factors beyond the company's control may influence its financial performance[209]. - The volatility of the stock market, particularly for life sciences companies, may not relate to the company's operating performance and could lead to litigation[205]. Compliance and Legal Issues - The company may be subject to product liability claims, which could divert management's attention and harm its business[187]. - Compliance with anti-bribery and anti-corruption laws is critical, as violations could lead to severe penalties and damage to the company's reputation[171]. - The company may struggle to protect its intellectual property rights, which could diminish the value of its proprietary technology and lead to increased legal expenses[181]. - Infringement claims from other parties could result in costly litigation and divert management resources, impacting overall business operations[182].
Odysight.ai Inc(ODYS) - 2023 Q3 - Quarterly Report