ScoutCam Closes $14 Million Private Placement

Rhea-AI Summary

ScoutCam (OTCQB: SCTC) announced a successful private placement of 3,294,117 units at $4.25 per unit, generating $14 million in gross proceeds. Each unit includes one share of common stock and a three-year warrant with an exercise price of $5.50. The funds will support working capital and advance the company’s Predictive Maintenance and Condition Based Monitoring technologies, critical for Industry 4.0. The placement was led by prominent investors, including Mori Arkin and Phoenix Insurance. However, the securities have not been registered under the Securities Act, limiting their resale. ScoutCam aims to leverage this investment to enhance its position in the video analytics AI predictive maintenance market.

Positive

• Successful private placement raised approximately $14 million to support growth.
• Funding will accelerate the development of innovative products in the predictive maintenance market.
• Strong support from existing investors highlights confidence in ScoutCam's potential.

Negative

• Securities from the private placement are not registered, restricting resale opportunities.
• Company may face funding challenges in the future, requiring additional capital.

OMER, Israel, March 17, 2023 (GLOBE NEWSWIRE) -- ScoutCam (OTCQB: SCTC), a leading provider of Predictive Maintenance (PdM) and Condition Based Monitoring (CBM) solutions, today announced that it has completed a private placement to existing stockholders, of 3,294,117 units, at a purchase price of $4.25 per unit, with each unit consisting of one share of the Company’s common stock and one three-year warrant to purchase one share of the Company’s common stock at an exercise price of $5.50 per share, pursuant to the terms of Stock Purchase Agreements entered into on March 16, 2023. Gross proceeds from the private placement of approximately $14 million are expected to be used for working capital and general corporate purposes, including to further advance the Company's innovative products and technology in the fields of Predictive Maintenance and Condition Based Monitoring, critical pillars of Industry 4.0.

The private placement was led by existing investors Mori Arkin, The Phoenix Insurance Company Ltd. (“Phoenix Insurance”) and Shotfut Menayot Israel – Phoenix Amitim (“Phoenix Amitim”). Mr. Arkin is also a member of the Company's board of directors.

“We are thrilled with the continued support and confidence of Mori Arkin, Phoenix Insurance and Phoenix Amitim. This investment, especially given volatile current market conditions, is a clear indication of their belief in Scoutcam’s strength and high potential,” said Yehu Ofer, Chief Executive Officer of ScoutCam. “These funds will allow ScoutCam the runway to accelerate our efforts to become a world leader in the video analytics cloud based AI predictive maintenance market.”

The securities sold in the private placement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state or other applicable jurisdiction's securities laws, and may not be offered or sold, directly or indirectly, or delivered within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state or other jurisdictions' securities laws. Concurrently with the closing, ScoutCam and the investors entered into registration rights agreements pursuant to which the Company has agreed to file a registration statement with the Securities and Exchange Commission registering the resale of the securities sold in the private placement no later than 120 days after the closing of the private placement.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any offer, solicitation or sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

About ScoutCam

ScoutCam is pioneering the Predictive Maintenance (PdM) and Condition Based Monitoring (CBM) markets with its visualization and AI platform. Providing video sensor-based solutions for critical systems in the aviation, transportation, and energy industries, ScoutCam leverages proven visual technologies and products from the medical industry. ScoutCam’s unique video-based sensors, embedded software, and AI algorithms are being deployed in hard-to-reach locations and harsh environments across a variety of PdM and CBM use cases. ScoutCam’s platform allows maintenance and operations teams visibility into areas which are inaccessible under normal operation, or where the operating ambience is not suitable for continuous real-time monitoring.

For more information, please visit: https://www.scoutcam.com or follow us on Twitter, LinkedIn and YouTube.

Forward-Looking Statements

Information set forth in this news release contains forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995 relating to future events or our future performance. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, but not limited to, use of and results achieved as a result of private placement proceeds. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. Those statements are based on information we have when those statements are made or our management’s current expectation and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Factors that may affect our results, performance, circumstances or achievements include, but are not limited to the following: (i) market acceptance of our existing and new products, including those that utilize our micro ScoutCam™ technology or offer Predictive Maintenance and Condition Based Monitoring applications, (ii) lengthy product delays in key markets, (iii) an inability to secure regulatory approvals for the sale of our products, (iv) intense competition in the medical device and related industries from much larger, multinational companies, (v) product liability claims, product malfunctions and the functionality of ScoutCam’s solutions under all environmental conditions, (vi) our limited manufacturing capabilities and reliance on third-parties for assistance, (vii) an inability to establish sales, marketing and distribution capabilities to commercialize our products, (viii) an inability to attract and retain qualified personnel, (ix) our efforts obtain and maintain intellectual property protection covering our products, which may not be successful, (x) our reliance on single suppliers for certain product components, including for miniature video sensors which are suitable for our Complementary Metal Oxide Semiconductor technology products, (xi) the fact that we will need to raise additional capital to meet our business requirements in the future and that such capital raising may be costly, dilutive or difficult to obtain, (xii) the impact of pandemics, such as COVID-19 (coronavirus) and (xiv) the fact that we conduct business in multiple foreign jurisdictions, exposing us to foreign currency exchange rate fluctuations, logistical, global supply chain and communications challenges, burdens and costs of compliance with foreign laws and political and economic instability in each jurisdiction. These and other important factors discussed in ScoutCam’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 30, 2022 and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Except as required under applicable securities legislation, ScoutCam undertakes no obligation to publicly update or revise forward-looking information.

Company Contact:

Tanya Yosef, CFO
tanya.yosef@scoutcam.com
Tel: +972 (73) 370 469

Investor Relations Contact:

Miri Segal
MS-IR LLC
msegal@ms-ir.com
Tel: +1-917-607-8654

FAQ

What is the total amount raised by ScoutCam in the private placement?

ScoutCam raised approximately $14 million in the private placement.

What is the purchase price per unit in the private placement for SCTC?

The purchase price per unit in the private placement was $4.25.

What is the exercise price for the warrants issued during the private placement for SCTC?

The exercise price for the warrants is $5.50 per share.

Who were the lead investors in ScoutCam's recent private placement?

The private placement was led by Mori Arkin and Phoenix Insurance Company Ltd.

How will ScoutCam use the proceeds from the private placement?

The proceeds will be used for working capital and to further develop predictive maintenance technologies.