What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2021-03-29 compared with 2020-03-19 · 566 added, 845 removed, 572 unchanged (71% of the section changed)

9 unchanged sentences

Consolidated Statements of Shareholders’

Equity (Deficit)

Consolidated Statements of Cash Flows

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Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated

balance sheets of My Size, Inc.

and subsidiaries (the Company) as of December 31, 2019 and 2018, the related consolidated statements

of comprehensive loss, shareholders’

equity (deficit), and cash flows for each of the years in the two-year period ended

December 31, 2019, and the related notes (collectively, 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 each of the years in the two-year period ended December 31, 2019,

in conformity with U.S.

generally accepted accounting principles.

We have audited the accompanying consolidated balance sheets

of My Size, Inc.

and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of comprehensive

loss, shareholders’

equity, and cash flows for each of the years in the two-year period ended December 31, 2020, and the

related notes (collectively, 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, 2020 and 2019, and the results of its

operations and its cash flows for each of the years in the two-year period ended December 31, 2020, in conformity with U.S.

accepted accounting principles.

Going Concern

The accompanying consolidated financial statements

have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1d to the consolidated financial

statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit

that raises substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters

are also described in Note 1d.

The consolidated financial statements do not include any adjustments that might result from the

outcome of this uncertainty.

Change in Accounting Principle

As discussed in Note 2 O to the consolidated

financial statements, the Company has changed its method of accounting for leases as of January 1, 2019, due to the adoption of

ASC 842, Leases.

The accompanying consolidated financial statements have been

prepared assuming that the Company will continue as a going concern.

As discussed in Note 1d to the consolidated financial statements,

the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit that raises

substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also

described in Note 1d.

The consolidated financial statements do not include any adjustments that might result from the outcome of

this uncertainty.

Basis for Opinion

These consolidated financial statements are

the responsibility of the Company’s management.

These consolidated financial statements

are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial

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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

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.

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that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising

from the current period audit of the consolidated financial statements that were communicated or required to be communicated to

the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements

and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ Somekh Chaikin

Somekh Chaikin

Certified Public Accountants (Isr.)

Member Firm of KPMG International

We have served as the Company’s auditor

We have served as the Company’s auditor since 2017.

Tel Aviv, Israel

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Restricted deposit

Short-term deposit

Accounts receivable

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Property and equipment, net

Right-of-use assets

Right-of-use asset

Investment in marketable securities

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Current liabilities:

Operating lease liabilities

Operating lease liability

Trade payables

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Total current liabilities

Operating lease liabilities

Operating lease liability

Total non-current liabilities

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Common stock of $ 0.001 par value - Authorized:

100,000,000 and 50,000,000 shares;

100,000,000 shares;

Issued and outstanding:

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Total liabilities and shareholders’

(*) Adjusted to give retroactive effect of 1:15 Reverse stock

split, see note 10 (b)

to give retroactive effect of 1:15 Reverse stock split, see note 10 (b)

The accompanying notes are an integral

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Basic and diluted weighted average number of shares outstanding

(*) Certain prior period amounts have been reclassified to

conform with current year presentation.

(**) Adjusted to give retroactive effect of 1:15 Reverse stock

split, see note 10 (b)

to give retroactive effect of 1:15 Reverse stock split, see note 10 (b)

The accompanying notes are an integral

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OF SHAREHOLDERS’

EQUITY (DEFICIT)

dollars in thousands (except share

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Balance as of December 31, 2018

Effect of early adoption of ASU 2018-07

Balance as of January 1, 2018

Stock-based compensation related to options granted to employees and consultants

Issuance of shares to consultants

Issuance of shares, net of issuance cost of $138

Reverse Stock Split (Note 10 (b)

Total comprehensive loss

Exercise of warrants and options

Liability reclassified to equity

Issuance and receipts on account of shares, net of issuance cost of $351

Balance as of December 31, 2019

Stock-base compensation related to options granted to employees and consultants

Issuance of shares to consultants

Stock-based compensation related to options granted to employees and consultants

Issuance of shares, net of issuance cost of $1,160

Reverse Stock Split (Note 10 (b)

Exercise of warrants and pre funded warrants

Liability reclassified to equity (**)

Total comprehensive loss

Balance as of December 31, 2020

(*) Represents an amount of less than $1.

(*) Represents

an amount of less than $1.

(**) See note 2 b

The accompanying notes are an integral

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Adjustments to reconcile net loss to net cash used in operating activities:

Change in right to use asset

Revaluation of warrants and derivatives and stock-based compensation liabilities

Interest payment of short-term loan

Amortization of operating lease right-of-use asset

Revaluation of warrants and derivatives

Interest and revaluation of short-term deposit

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Capital loss on disposal of property and equipment

Stock based compensation - equity

Stock based compensation - liability

Change in embedded derivative

Increase in accounts receivable

Decrease (increase) in other receivables and prepaid expenses

Increase in trade payables

Increase (decrease) in accounts payables

Stock based compensation

Decrease (increase) in accounts receivable

Increase in other receivables and prepaid expenses

(Decrease) increase in trade payables

(Decrease) increase in accounts payables

Net cash used in operating activities

Cash flows from investing activities:

Proceeds from (investment in) short-term deposits, net

Proceeds from short-term deposits, net

Proceeds from (investment in) restricted deposits, net

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Cash flows from financing activities:

Proceeds from exercise of warrants and options

Proceeds from issuance of shares, net of issuance costs

Proceeds from Exercise of warrants and pre funded warrants

Proceeds from issuance of shares, warrants and short-term loan, net

Repayment of short term loan, net of issuance costs

Net cash provided by financing activities

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Increase (Decrease) in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at the beginning

Cash and cash equivalents and restricted cash at the end of

Non cash activities:

Exercise of warrants and stock-based compensation to equity

stock-based compensation liability reclassified to equity

Derivative liability reclassified to equity

Cash and cash equivalents and restricted cash at the beginning of the year

Cash and cash equivalents and restricted cash at the end of the year

The accompanying notes are an integral

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My Size, Inc.

is developing unique measurement technologies based

on algorithms with applications in a variety of areas, from the apparel e-commerce market, to the courier services market and to

the Do It Yourself (“DIY”) smartphone and tablet apps market.

The technology is driven by proprietary algorithms, which

are able to calculate and record measurements in a variety of novel ways.

The Company has two subsidiaries, My

is developing unique measurement

technologies based on algorithms with applications in a variety of areas, from the apparel e-commerce market, to the courier services

market and to the Do It Yourself (“DIY”) smartphone and tablet apps market.

The technology is driven by proprietary

algorithms, which are able to calculate and record measurements in a variety of novel ways.

The Company has three subsidiaries, My

Size Israel 2014 Ltd.

(“My Size Israel”) and Topspin Medical (Israel) Ltd., both of which are incorporated in

References to the Company include the subsidiaries unless the context indicates otherwise.

(“My Size Israel”) and Topspin Medical (Israel) Ltd., both of which are incorporated in Israel

and My Size LLC which was incorporated in Russian Federation.

References to the Company include the subsidiaries unless the context

indicates otherwise.

My Size, Inc., was incorporated

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resumed reporting as a public company.

On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’s investors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent application that had been filed by the Seller (the “Assets”).

The Venture relates to the development of technologies and applications which will assist the consumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fit without the need to try them on.

January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the

Company’s investors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including

the rights to the method and the certain patent application that had been filed by the Seller (the “Assets”).

Venture relates to the development of technologies and applications which will assist the consumer to take his or her body measurements

accurately using a mobile device to ensure the purchase of clothing with the best possible fit without the need to try them on.

In February 2014, the Company established

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the identity of the consultant.

On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.

As of December 31, 2020, the Company has only generated limited

revenue and as a consequence of the passage of seven years since execution of the agreement with the Seller, the Seller, has a

right to repurchase the Assets for 90 days from February 16, 2021.

The Company intends to negotiate the waiver of the Seller’s

right to repurchase of the Assets and in consideration of such waiver expect to pay cash or issue shares of common stock and/or

common stock equivalents, or a combination of both.

July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.

The Company’s shares of common stock are listed both on the Nasdaq Capital Market and TASE.

Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $28,514.

The Company has financed its operations mainly through fundraising from various investors.

Since inception, the Company has incurred significant

losses and negative cash flows from operations and has an accumulated deficit of $34,671.

The Company has financed its operations

mainly through fundraising from various investors.

The Company’s management

expects that the Company will continue to generate losses and negative cash flows from operations for the foreseeable future.

on the projected cash flows and cash balances as of December 31, 2020, management is of the opinion that its existing cash will

be sufficient to fund operations until the end of January 2022.

As a result, there is substantial doubt about the Company’s

ability to continue as a going concern.

MY SIZE, INC.

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data and per share data)

GENERAL (Cont.)

The Company’s management expects that the Company will

continue to generate losses and negative cash flows from operations for the foreseeable future.

Based on the projected cash flows

and cash balances as of December 31, 2019, management is of the opinion that its existing cash will be sufficient to fund operations

until the end of August 2020.

As a result, there is substantial doubt about the Company’s ability to continue as a going concern.

Management’s

plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale

of additional equity securities, debt or capital inflows from strategic partnerships.

Additional funds may not be available when

the Company needs them, on terms that are acceptable to it, or at all.

If the Company is unsuccessful in commercializing its products

and securing sufficient financing, it may need to cease operations.

Management’s plans include

the continued commercialization of the Company’s products and securing sufficient financing through the sale of additional

equity securities, debt or capital inflows from strategic partnerships.

Additional funds may not be available when the Company

needs them, on terms that are acceptable to it, or at all.

If the Company is unsuccessful in commercializing its products and securing

sufficient financing, it may need to cease operations.

The financial statements include

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as a going concern.

The Company operates

in one reportable segment and all of its long-lived assets are located in Israel.

SIGNIFICANT ACCOUNTING

The consolidated financial

statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S.

GAAP”).

Use of estimates:

Company operates in one reportable segment and all of its long-lived assets are located in Israel.

late 2019, a novel strain of COVID-19, also known as coronavirus, was reported in Wuhan, China.

While initially the outbreak was

largely concentrated in China, it has now spread to Israel and the United States, and infections have been reported globally.

Many countries around the world, including in Israel, have significant governmental measures being implemented to control the

spread of the virus, including temporary closure of businesses, severe restrictions on travel and the movement of people, and

other material limitations on the conduct of business.

These measures have resulted in work stoppages and other disruptions.

The Company has implemented remote working and work place protocols for its employees in accordance with government requirements.

In addition, while the Company has seen an increased demand for MySizeID, the COVID-19 pandemic has had a particularly adverse

impact on the retail industry and this has resulted in an adverse impact on the Company’s marketing and sales activities.

For example, the Company has three ongoing pilots with international retailers that have been halted, the Company is unable to

participate physically in industry conferences, its ability to meet with potential customers is limited and in certain instances

sales processes have been delayed or cancelled.

The extent to which COVID-19 continues to impact the Company’s operations

will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration

and severity of the outbreak, and the actions that may be required to contain COVID-19 or treat its impact.

2 - SIGNIFICANT

ACCOUNTING POLICIES

The consolidated financial statements are prepared according

to United States generally accepted accounting principles (“U.S.

GAAP”), applied on a consistent basis, as follows

of estimates:

The preparation of financial statements

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Actual results could differ from those estimates.

Financial statements

The currency of the primary economic

environment in which the operations of the Company and its subsidiary are conducted is the New Israeli Shekel (“NIS”)

In 2019 the currency of the primary

economic environment in which the operations of the Company and its subsidiary are conducted is the New Israeli Shekel (“NIS”)

and thus it is the Company’s and its subsidiary functional currency.

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statements are prepared is the U.S.

The financial statements are translated as follows:

Assets and liabilities

at the end of each reporting period (including comparative data) are translated at the closing rate at the end of the reporting

Income and expenses

for each period included in profit or loss (including comparative data) are translated at average exchange rates for the relevant

however, if exchange rates fluctuate significantly, income and expenses are translated at the exchange rates at the

date of the transactions.

Stock capital, capital

reserves and other changes in capital are translated at the exchange rate prevailing at the date of incurrence.

Accumulated deficit

is translated based on the opening balance translated at the exchange rate at that date and other relevant transactions during

the year are translated as described in 2) and 3) above.

All resulting translation

adjustments are recognized as a separate component of accumulated other comprehensive loss in equity

The Company reassessed its functional

currency and determined to change its functional currency to the U.S.

dollar from the NIS as of January 1, 2020.

The change in

functional currency was accounted for prospectively from such date.

Israel functional currency remains the NIS.

As a result of the change in the

Company’s functional currency, the Company reclassified its warrants that were outstanding as a financial liability in an

amount of $328 as at December 31, 2019 to equity.

MY SIZE, INC.

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data and per share data)

SIGNIFICANT ACCOUNTING

POLICIES (Cont.)

The Company reassessed its functional

currency and determined to change its functional currency to the U.S.

dollar from the NIS as of January 1, 2020.

The change in

functional currency will be accounted for prospectively from such date.

In 2019, the Company went through a strategic shift which

involved a significant change in its business model, that clearly indicates that the functional currency has changed, beginning

January 2020.

In previous years, the Company acted as a platform to fund its operational subsidiary, My Size Israel, which conducts

its research and development activities in NIS.

Accordingly, the Company has not been substantially focused on its operating activities

for that period.

By the end of 2018, the Company transitioned to a new business model (B2B2C) and concluded that the main market

that the Company should focus on would be the apparel market in the US.

Consequently, the Company established marketing and distribution

channels in the US along with having a new pricing model denominated in USD.

Throughout 2019, the Company itself hired sales personnel

which are based in the US and signed agreements with customers for which it began generating revenue in USD for the first time

since it began its operations.

Accordingly, by the end of 2019, the Company is no longer considered a ‘holding company’

for the matter of determining its functional currency under ASC 830 based on the currency of its operating entities.

of being an operational company that enters into operational agreements and generates revenues on an ongoing basis, the management

of the Company has concluded that as of January 1 2020, the currency that most faithfully portrays the economic results of the

Company's operations is the U.S.

dollar beginning January 1 2020.

My Size Israel functional currency

remains the NIS.

Principles of consolidation:

2 - SIGNIFICANT

ACCOUNTING POLICIES (Cont.)

of consolidation:

The consolidated financial statements

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upon consolidation.

Cash equivalents:

Cash equivalents are short-term

highly liquid investments that are readily convertible to cash with original maturities of three months or less at the date acquired.

Property and equipment:

and equipment:

Property and equipment are stated

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Over the term of the lease or the useful life of the improvements, whichever is shorter

Impairment of long-lived

of long-lived assets:

The Company’s property and

equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, whenever events

or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to

be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected

to be generated by the assets.

If such assets are considered to be impaired, the impairment to be recognized is measured by the

amount by which the carrying amount of the assets exceeds the fair value of the assets.

Assets to be disposed of are reported

at the lower of the carrying amount or fair value less selling costs.

During the periods ended December 31, 2019 and 2018, no

impairment losses have been recorded.

Severance pay:

equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, whenever events or

changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held

and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated

by the assets.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which

the carrying amount of the assets exceeds the fair value of the assets.

Assets to be disposed of are reported at the lower of the

carrying amount or fair value less selling costs.

During the periods ended December 31, 2020 and 2019, no impairment losses have

been recorded.

The Subsidiary’s liability

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data and per share data)

SIGNIFICANT ACCOUNTING

POLICIES (Cont.)

Research and development

2 - SIGNIFICANT

ACCOUNTING POLICIES (Cont.)

and development costs:

Research and development costs

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Most of the research and development expenses are for wages and subcontractors.

Income taxes:

The Company accounts for income

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future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’

Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities

using enacted tax rates in effect in the years in which the differences are expected to reverse.

The Company assesses the likelihood

that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight

of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized.

Company establishes a valuation allowance, if necessary, to reduce deferred tax assets to the amount more likely than not to be

Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and

liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

The Company assesses

the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based

upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be

The Company establishes a valuation allowance, if necessary, to reduce deferred tax assets to the amount more likely

than not to be realized.

As of December 31, 2020, and 2019, a full valuation allowance was established by the Company.

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As such, as of December 31, 2020 and 2019 the Company has not recorded a liability for unrecognized tax benefits.

Accounting for stock-based

compensation:

The Company accounts for its

employees’

for stock-based compensation:

The Company accounts for its employees’

stock-based compensation as an expense in the financial statements based on ASC 718.

All awards are equity

classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution

approach to recognize compensation cost over the vesting period.

The Company estimates stock option grant date fair value

using the Binomial option pricing-model.

All awards are equity classified and therefore

such costs are measured at the grant date fair value of the award and graded vesting attribution approach to recognize compensation

cost over the vesting period.

The Company estimates stock option grant date fair value using the Binomial option pricing-model.

The Company recorded stock options

issued to non-employees at the grant date fair value, and recognizes expenses over the related service period by using the straight-line

attribution approach.

attribution approach in accordance with ASU 2018-07.

All awards are equity classified.

On June 20, 2018, the FASB issued ASU 2018-07, Stock Compensation:

Improvements to Nonemployee Stock-Based Payment Accounting, to align the guidance for stock compensation to employees and nonemployees,

which replaces ASC 505-50, Equity-Equity-Based Payments to Non-Employees.

elected to early adopt the guidance as of October 1, 2018.

The ASU affected the measurement

and classification of the stock-based payments to consultants in the Company’s financial statements.

The fair value of each

agreement at the adoption date is being considered as the new fair value of the stock-based payments to consultants and the expenses

will be recognized over the remaining service period.

Furthermore, as of the adoption date, stock-based payments to consultants

were classified as equity.

The expected volatility of the

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data and per share data)

SIGNIFICANT ACCOUNTING

POLICIES (Cont.)

Fair value of financial

2 - SIGNIFICANT

ACCOUNTING POLICIES (Cont.)

value of financial instruments:

ASC 820, Fair Value Measurements

and Disclosures, relating to fair value measurements, defines fair value and established a framework for measuring fair value.

The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market data obtained

from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions

The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market data obtained from

sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions

developed based on the best information available in the circumstances.

ASC 820 defines fair value as the price that would be

received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement

date, essentially an exit price.

ASC 820 defines fair value as the price that would be received

to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date,

essentially an exit price.

In addition, the fair value of assets and liabilities should include consideration of non-performance

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in measuring fair value:

Valuations based

on quoted prices in active markets for identical assets that the Company has the ability to access.

Valuation adjustments

and block discounts are not applied to Level 1 instruments.

Since valuations are based on quoted prices that are readily and

regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

Valuations based

on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly

or indirectly.

Valuations based

on inputs that are unobservable and significant to the overall fair value measurement.

Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access.

Valuation adjustments and block discounts are not applied to Level 1 instruments.

Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The expected volatility of the

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in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publicly-traded company on the OTCQB.

Due to sales restrictions on the

sale of the iMine share, the fair value of the shares was measured on the basis of the quoted market price for an otherwise identical

unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the sales

restrictions and is therefore, ranked as Level 2 asset.

Basic and diluted

net loss per share:

Basic net loss per share is computed

based on the weighted average number of shares of common stock outstanding during each year.

Diluted net income per share is computed

based on the weighted average number of shares of common stock outstanding during each year plus dilutive potential equivalent

common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”.

For the years

ended December 31, 2019 and 2018, all outstanding options and warrants have been excluded from the calculation of the diluted net

loss per share since their effect was anti-dilutive.

As described in Note 10a, for accounting purposes,

the loss per share amounts have been adjusted to give retroactive effect to the Exchange Ratio and the Reverse Stock Split for

all periods presented in these consolidated financial statements.

Concentrations of

Due to sales restrictions on the sale of the iMine shares, the

fair value of the shares was measured on the basis of the quoted market price for an otherwise identical unrestricted equity instrument

of the same issuer that trades in a public market, adjusted to reflect the effect of the sales restrictions and is therefore, ranked

as Level 2 asset.

and diluted net loss per share:

Basic net loss per share is computed based on the weighted average

number of shares of common stock outstanding during each year.

Diluted net income per share is computed based on the weighted average

number of shares of common stock outstanding during each year plus dilutive potential equivalent common stock considered outstanding

during the year, in accordance with ASC 260, “Earnings per Share”.

For the year ended December 31, 2020, all outstanding

options and warrants have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive.

For the year ended December 31, 2019, some of the outstanding warrants have been included in the calculation of the diluted net

loss per share since their effect was dilutive.

As described in Note 10a, for accounting

purposes, the loss per share amounts have been adjusted to give retroactive effect to the Exchange Ratio and the Reverse Stock

Split for all periods presented in these consolidated financial statements.

Concentrations

of credit risk:

Financial instruments that potentially

subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash and cash equivalents.

Cash and cash equivalents and

short term deposits are invested in banks in Israel and United States.

Such deposits in Israel may be in excess of insured limits

and are not insured in other jurisdictions.

Management believes that the financial institutions that hold the Company’s

investments are financially sound and, accordingly, minimal credit risk exists with respect to these investments.

Cash and cash equivalents are invested

in banks in Israel and United States.

Such deposits in Israel may be in excess of insured limits and are not insured in other jurisdictions.

Management believes that the financial institutions that hold the Company’s investments are financially sound and, accordingly,

minimal credit risk exists with respect to these investments.

The Company and its subsidiaries

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data and per share data)

SIGNIFICANT ACCOUNTING

POLICIES (Cont.)

Revenue from contracts with customers:

The Financial Accounting Standards

Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers

(Topic 606) (ASU 2014-09), an updated standard on revenue recognition and issued subsequent amendments to the initial guidance

in March 2016, April 2016, May 2016 and December 2016 within ASU 2016-08, 2016-10, 2016-12 and 2016-20, respectively (collectively,

“ASC 606”).

The core principle of the new standard is for companies to recognize revenue to depict the transfer of

services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those

goods and services.

In addition, the new standard requires expanded disclosures.

The Company has adopted the standard effective

January 1, 2018.

The reported results for the year ended December 31, 2019 reflect the application of ASC 606 guidance.

2 - SIGNIFICANT

ACCOUNTING POLICIES (Cont.)

from contracts with customers:

The Company implemented ASC 606, Revenue from Contract with

To recognize revenue under ASC

606, the Company applies the following five steps:

Identify the contract with a customer.

A contract with a customer exists when the Company enters into an enforceable contract

with a customer and the Company determines that collection of substantially all consideration for the services is probable.

Identify the performance obligations in the contract.

Determine the transaction price.

The transaction price is determined based on the consideration to which the Company will be

entitled in exchange for providing the service to the customer.

Allocate the transaction price to performance obligations in the contract.

If a contract contains a single performance obligation,

the entire transaction price is allocated to the single performance obligation.

Recognize revenue when or as the Company satisfies a performance obligation.

When the Company provides a service, revenue is

recognized over the service term.

The Company’s revenue is derived from the sale of

cloud-enabled software subscriptions, associated software maintenance and support.

the contract with a customer.

A contract with a customer exists when the Company enters into an enforceable contract with a customer

and the Company determines that collection of substantially all consideration for the services is probable.

the performance obligations in the contract.

the transaction price.

The transaction price is determined based on the consideration to which the Company will be entitled in

exchange for providing the service to the customer.

the transaction price to performance obligations in the contract.

If a contract contains a single performance obligation, the

entire transaction price is allocated to the single performance obligation.

revenue when or as the Company satisfies a performance obligation.

When the Company provides a service, revenue is recognized

over the service term.

The Company’s revenue

is derived from License cloud-enabled software subscriptions, associated software maintenance and support.

Revenue is recognized when a

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accounted for as separate performance obligations.

In case of offerings such as cloud-enabled subscription, other service elements

In case of offerings such as cloud-enabled license services, other service elements

in the contract are generally delivered concurrently with the subscription services and therefore revenue is recognized in a similar

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Services Offerings

Such performance obligations

includes cloud-enabled subscriptions, software maintenance, training and technical support.

Fully hosted subscription services (SaaS) allow customers

to access hosted software during the contractual term without taking possession of the software.

Cloud-hosted subscription services

are sold on a fee-per-subscription that is based on consumption or usage (per fit recommendation).

We recognize revenue ratably

over the contractual service term for hosted services that are priced based on a committed number of transactions where the delivery

and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the

committed transactions are first made available to the customer and continuing through the end of the contractual service term.

Over-usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees

are incurred and are included in the transaction price of an arrangement as variable consideration.

Fees based on a number of

transactions or impressions per month, are allocated to the period in which the transactions occur.

Revenue for subscriptions

sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes

the benefit of the underlying service.

Such performance obligations includes cloud-enabled subscriptions,

software maintenance and technical support.

Fully hosted subscription services

(SaaS) allow customers to access hosted software during the contractual term without taking possession of the software.

subscription services are sold on a fee-per-subscription that is based on consumption or usage (per fit recommendation).

The Company recognizes revenue ratably over the contractual service

term for hosted services that are priced based on a committed number of transactions where the delivery and consumption of the

benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions are

first made available to the customer and continuing through the end of the contractual service term.

Over-usage fees and fees based

on the actual number of transactions are billed in accordance with contract terms as these fees are incurred and are included in

the transaction price of an arrangement as variable consideration.

Fees based on a number of transactions or impressions per month,

are allocated to the period in which the transactions occur.

Revenue for subscriptions sold as a fee per period is recognized ratably

over the contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.

MY SIZE, INC.

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data and per share data)

SIGNIFICANT ACCOUNTING

POLICIES (Cont.)

Impact of recently

adopted accounting standard:

In February 2016, the FASB issued ASU 2016-02,

Leases (Topic 842) (“ASU 2016-02”).

ASU 2016-02 is intended to increase transparency and comparability of accounting

for lease transactions.

For all leases with terms greater than twelve months, the new guidance requires lessees to recognize right-of-use

assets and corresponding lease liabilities on the balance sheet and to disclose qualitative and quantitative information about

lease transactions.

The new standard maintains a distinction between finance leases and operating leases.

As a result, the effect

of leases in the statement of operations and statement of cash flows is largely unchanged.

ASU 2016-02 is effective starting January

In July 2018, the FASB issued ASU 2018-11, Leases - Targeted Improvements, to allow a company to elect an optional modified

retrospective transition method that applies the new lease requirements through a cumulative-effect adjustment in the period of

Effective as of January 1, 2019, the Company adopted the new lease accounting standard using the modified retrospective

transition option of applying the new standard at the adoption date.

The Company leases include an office space lease agreement

for 36 months, with an option to extend for an additional 36 months and 36 months cancelable operating lease agreements on behalf

of personnel vehicles.

The lease term includes a non-cancellable period of the lease plus any additional periods covered by either

a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to

extend (or not to terminate) the lease controlled by the lessor.

For the office rent lease the Company has

elected to account for the lease and non-lease maintenance components as a single lease component.

Therefore, the lease payments

used to measure the lease liability include all of the fixed consideration in the contract, including in-substance fixed payments,

owed over the lease term.

Adoption of the new standard resulted in the recording of operating lease right-to-use assets and operating

lease liabilities on the Company’s consolidated balance sheets, but did not have an impact on the Company’s beginning

balance of retained earnings, consolidated statement of operations or statement of cash flows.

The most significant impact was

the recognition of right-to-use assets and lease liabilities on account of the Company’s operating leases.

The Company recognized $127 of

right of use assets and operating lease liabilities at January 1, 2019.

In addition, the right-of-use assets include leasehold

improvements.

What changed 10-K

Item 8. Financial Statements and Supplementary Data