ODYSHIGH SIGNALFINANCIAL10-K

ODYS shows severe operational deterioration with operating losses widening 45% to $18.1M despite strong cash position improvement.

The company is burning through cash at an accelerated rate with operating cash flow declining 67% to -$13.7M, indicating unsustainable business fundamentals despite having adequate liquidity. The dramatic 82% drop in accounts receivable and 75% inventory reduction suggests either collection issues or significant business contraction, while R&D spending increased 40% during a period of operational stress.

Comparing 2026-03-19 vs 2025-03-26View on EDGAR →
FINANCIAL ANALYSIS

ODYS presents a mixed but concerning financial picture with strong balance sheet improvements (cash up 41% to $25.7M, liabilities down 35%) offset by severe operational deterioration. Operating losses widened 45% to $18.1M while operating cash burn accelerated 67% to -$13.7M, indicating the company is consuming cash faster than ever despite adequate liquidity. The dramatic contraction in accounts receivable (-82%) and inventory (-75%) alongside increased R&D spending suggests either significant business downsizing or collection difficulties, raising questions about revenue sustainability and cash runway despite the improved cash position.

FINANCIAL STATEMENT CHANGES
Accounts Receivable
Balance Sheet
-81.6%
$1.5M→$278K

Receivables declined — improved collection efficiency or conservative revenue recognition.

Inventory
Balance Sheet
-75.4%
$203K→$50K

Inventory drawn down 75.4% — strong sell-through or deliberate destocking; watch for supply constraints.

Interest Expense
P&L
+74.8%
$5K→$8K

Interest expense surged 74.8% — significant debt increase or rising rates materially impacting earnings.

Operating Cash Flow
Cash Flow
-66.8%
-$8.2M→-$13.7M

Operating cash flow fell 66.8% — earnings quality concerns; investigate working capital changes and non-cash items.

Operating Income
P&L
-45%
-$12.5M→-$18.1M

Operating income deteriorated sharply — investigate whether driven by one-time charges or structural cost issues.

Net Income
P&L
-44.8%
-$11.8M→-$17.0M

Net income declined 44.8% — review whether driven by operations, interest costs, or non-recurring items.

Cash & Equivalents
Balance Sheet
+41.4%
$18.2M→$25.7M

Cash position surged 41.4% — strong cash generation or capital raise providing significant financial cushion.

R&D Expense
P&L
+40%
$6.9M→$9.6M

R&D investment increased 40% — signals commitment to future product development, though near-term margin impact.

Stockholders Equity
Balance Sheet
+39.4%
$18.2M→$25.4M

Equity base grew 39.4% — retained earnings accumulation or equity issuance strengthening the balance sheet.

Total Liabilities
Balance Sheet
-34.6%
$5.4M→$3.6M

Liabilities reduced 34.6% — deleveraging improves balance sheet strength and financial flexibility.

LANGUAGE CHANGES
NEW — 2026-03-19
PRIOR — 2025-03-26
ADDED
As of March 18, 2026, there were 16,359,410 shares of the registrant s common stock outstanding.
FORM 10-K SUMMARY 73 SIGNATURES 74 2 INTRODUCTION In this Annual Report on Form 10-K, unless the context requires otherwise, the terms we, our, us, or the Company refer to Odysight.ai Inc., a Nevada corporation, and its subsidiaries, including Odysight.ai Ltd., Odysight.Ai EU S.r.l., and D.
All references to common stock and share capital refer to common stock and share capital of Odysight.ai Inc.
Our historical results do not necessarily indicate our expected results for any future periods.
Any discrepancies in any table between totals and sums of the amounts listed are due to rounding.
Unless otherwise indicated, or the context otherwise requires, references in this Annual Report to financial and operational data for a particular year refer to the fiscal year of our Company ended December 31 of that year.
Some of our financial measures are not prepared in accordance with generally accepted accounting principles, or non-GAAP, under Securities and Exchange Commission, or the SEC, rules and regulations.
For example, in this Annual Report on Form 10-K, we present backlog, which is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K.
Backlog is a non-GAAP financial measures that is presented for supplemental informational purposes only, and is not intended to be a substitute for any GAAP financial measures, including revenue or net income (loss), and, as calculated, may not be comparable to companies in other industries or within the same industry with similarly titled measures of performance.
In addition, this non-GAAP measure should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
REMOVED
Employer Identification No.) Suite 7A , Industrial Park , P.O.
As of March 20, 2025, there were 16,307,321 shares of the registrant s common stock outstanding.
Our Company We are a pioneer in the development, production and marketing of an innovative visualization AI solution that deploys small cameras to monitor critical safety components in hard-to-reach locations and harsh environments, across various PdM, and CBM use cases.
The Odysight TruVision solution streams visual information to our processing unit, an in-platform, high-performance AI/machine learning computer, allowing maintenance and operations teams, on the ground and during operations, visibility into areas that are inaccessible under normal operating conditions or where conditions are not suitable for continuous real-time monitoring.
Our solution enhances safety and minimizes downtime by enabling real-time visual analysis of any failure occurrences.
Additionally, we leverage advanced big data analytics to offer predictive insights throughout the entire system lifecycle.
The Odysight TruVision solution is successfully used by NASA, as we seek to reshape the aerospace, Industry 4.0, transportation and energy markets with a vison-based technology leveraging AI and machine learning to deliver innovative solutions that transform maintenance practices.
As used in this Annual Report, Industry 4.0, or I4.0, refers to the integration of advanced technologies into manufacturing and industrial processes to create smart, interconnected systems for improved efficiency and productivity.
Odysight solutions are already deployed in the aviation and medical sectors.
Our customers include the Israeli Air Force, the Israeli Ministry of Defense, France-based Safran Aircraft Engines, a global international defense contractor, a leading Fortune 500 medical company as well as NASA, who came back to us for a repeat order.
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