DEF: Odysight.ai Sets 2025 Annual Meeting Agenda, Boosts Share Plan

Odysight.ai Inc. has announced its 2025 Annual Meeting of Stockholders to address director elections, executive compensation, auditor ratification, and a significant increase in its share incentive plan.

Summary

• The Annual Meeting of Stockholders is scheduled for December 2, 2025, at 10:00 a.m. EDT / 5:00 p.m. IDT in Ramat Gan, Israel.
• Stockholders will vote on the election of Carlo Papa, Nir Nimrodi, and Zeev Vurembrand as Class I directors, with terms expiring at the 2028 Annual Meeting.
• An advisory vote will be held on the compensation paid to named executive officers, with the Board recommending approval.
• Stockholders will also advise on the frequency of future executive compensation votes, with the Board recommending a triennial (every three years) approach.
• A proposal to amend the 2024 Share Incentive Plan will be voted on, seeking to increase the shares reserved for issuance by 777,000, from 1,111,263 to 1,888,263 shares.
• The appointment of Brightman Almagor Zohar & Co. (Deloitte) as the independent registered accounting firm for fiscal year 2025 will be ratified.
• The company reported a net loss of $11,767,000 for 2024, an increase from $9,668,000 in 2023.
• Total Shareholder Return (TSR) for 2024 showed a $100 investment increasing to $162, indicating a 62% return.
• Executive compensation for 2024 included Yehu Ofer (CEO) with a total of $1,108,000, Einav Brenner (CFO) with $673,000, and Jacob Avinu (Senior VP Product Portfolio) with $538,000.
• Related party transactions included a $10.3 million private placement in July 2024, participation by More Group and Sudoku Capital Ltd. in a February 2025 public offering, and a cloud services agreement with AllCloud (where director Ronit Rubin is Co-CEO) for up to $100,000 annually.

Sentiment

Score: 6

Explanation: The filing is a standard proxy statement with routine proposals. While the net loss increased, the positive TSR for 2024 is a favorable sign. The proposed increase in the share incentive plan is a strategic move for talent retention and growth, which is generally positive for long-term prospects but introduces potential dilution. The related party transactions are disclosed and appear to be within normal business operations. Overall, the sentiment is moderately positive due to strategic growth initiatives and positive TSR, despite the increased net loss.

Positives

• Total Shareholder Return (TSR) for 2024 was positive, with a $100 investment growing to $162, representing a 62% increase.
• The proposed increase in the 2024 Share Incentive Plan by 777,000 shares aims to attract and retain key personnel, which is essential for long-term growth and success, particularly in the U.S. and Europe.
• The company has established robust corporate governance practices, including an Executive Officer Clawback Policy, Insider Trading Policy, and Anti-Hedging Policy.
• The Board of Directors unanimously recommends approval of all key proposals, including director elections, executive compensation, and the share incentive plan increase, indicating internal alignment.

Negatives

• The company's net loss increased to $11,767,000 in 2024 from $9,668,000 in 2023, indicating a worsening financial performance in terms of profitability.
• The proposed increase in the 2024 Share Incentive Plan could lead to further dilution for existing stockholders.

Risks

• The staggered three-year terms for the Board of Directors may delay or prevent a change of management or a change in control of the company.
• The enforceability of noncompetition provisions in executive employment agreements may be limited under applicable law.
• If the proposed increase to the 2024 Share Incentive Plan is not approved, the company may have an insufficient number of shares to meet projected needs, potentially impairing its ability to attract and retain key personnel.

Future Outlook

The company aims to attract and retain key personnel to support its long-term growth plans, including expansion in the U.S. and Europe. This is evidenced by the proposed increase in the share incentive plan and the appointment of a Senior VP Head of U.S. Business Unit and a Chairman for Odysight.ai EU. The Board recommends a triennial advisory vote on executive compensation to allow sufficient time to evaluate the effectiveness of compensation policies in the context of long-term business results.

Management Comments

• "Whether or not you attend the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting. Therefore, I urge you to promptly vote and submit your proxy by phone, via the Internet, or, if you received paper copies of these materials, by signing, dating and returning the enclosed proxy card in the enclosed envelope, which requires no postage if mailed in the United States." Prof. Benad Goldwasser, Chairman (from the letter to stockholders).

Industry Context

The company's focus on expanding in the U.S. and European markets, as indicated by new executive roles and the need for increased share incentives, suggests a strategic push for market penetration and talent acquisition in competitive global technology and defense sectors. The emphasis on attracting and retaining key personnel through equity plans is a common practice in high-growth or technology-driven industries to align employee incentives with shareholder value.

Comparison to Industry Standards

• The company's net loss increased by $2,322,000 in 2024, which may be a concern compared to industry peers, especially if competitors are demonstrating improved profitability or reduced losses.
• The 62% Total Shareholder Return (TSR) for 2024 is a strong performance indicator, potentially outperforming many industry benchmarks, though specific comparable companies or projects are not detailed in the filing.
• The proposed increase in the share incentive plan to attract and retain talent is a standard practice in the technology and defense sectors, where competition for skilled professionals is high. The size of the increase (777,000 shares) should be evaluated against peer companies' equity compensation practices and dilution rates.
• The adoption of an Executive Officer Clawback Policy aligns with evolving corporate governance best practices and regulatory requirements (Nasdaq listing standards and Exchange Act Rule 10D-1), demonstrating a commitment to accountability that is comparable to leading public companies.

Management Changes

Corporate Governance

Related Party Transactions

• On July 16, 2024, the company issued 2,144,583 shares of common stock at $4.80 per share in a private placement to new and existing investors, including Mr. Arkin (via M. Arkin (1999) Ltd.), a director, and The Phoenix Holdings, raising approximately $10.3 million (gross).
• In February 2025, one or more entities affiliated with the More Group and Sudoku Capital Ltd. (an entity affiliated with Shmuel Harlap) purchased 1,046,672 shares and 1,153,846 shares, respectively, of common stock in the company's underwritten public offering. More Group was a more than 5% beneficial owner prior to the offering, and Sudoku Capital became one after its participation.
• On July 27, 2025, the company entered into a cloud services agreement with AllCloud for the provision of certain cloud services in an amount of up to $100,000 per year. Ronit Rubin, a member of the board of directors, serves as a Co-CEO of AllCloud.
• On August 13, 2025, the company entered into a revised Director Appointment and Service Agreement with Jackson Schneider, a director. His annual fee increased from $80,000 to $120,000, and he will receive a potential one-time commission for initiating or facilitating new commercial agreements with pre-approved third parties, structured as 2% on net revenue up to $250 million, 1.5% between $250 million and $400 million, and 1% exceeding $400 million.

Stakeholder Impact

• Shareholders: Will vote on key governance matters, including director elections, executive compensation, and a significant increase in the share incentive plan, which could lead to dilution. The positive TSR for 2024 is beneficial, but the increased net loss is a concern.
• Employees/Management: The proposed increase in the 2024 Share Incentive Plan is intended to attract and retain key personnel, offering them greater equity incentives. Executive and director compensation packages are detailed, showing significant equity awards.
• Customers/Suppliers: The cloud services agreement with AllCloud (a related party) indicates ongoing operational relationships. Jackson Schneider's revised agreement includes commissions for new commercial agreements, potentially benefiting customers through new product offerings.
• Regulatory Bodies: The filing demonstrates compliance with SEC and Nasdaq rules, including disclosures on corporate governance, executive compensation, and related party transactions.

Next Steps

• Stockholders to vote on director elections, executive compensation, frequency of executive compensation votes, 2024 Share Incentive Plan amendment, and auditor ratification at the Annual Meeting on December 2, 2025.
• The company will announce preliminary voting results at the Annual Meeting and report final results in a Current Report on Form 8-K.
• The compensation committee will consider stockholder feedback from the advisory vote on executive compensation when determining future compensation.
• The audit committee will consider stockholder ratification of Deloitte's appointment for fiscal year 2025.

Key Dates

Keywords

Proxy Statement, Annual Meeting, Director Election, Executive Compensation, Share Incentive Plan, Stock Options, Corporate Governance, Auditor Ratification, SEC Filing, Odysight.ai