What changed in this filing

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Item 1. Financial Statements

2021-05-14 compared with 2020-11-12 · 433 added, 829 removed, 177 unchanged (88% of the section changed)

1 unchanged sentence

and Subsidiaries

of September 30, 2020

of March 31, 2021

Dollars in Thousands

AND ITS SUBSIDIARIES

Consolidated Interim Financial Statements as of September 30, 2020 (Unaudited)

Consolidated Interim Financial Statements as of March 31, 2021 (Unaudited)

Condensed Consolidated Interim Balance Sheets

6 unchanged sentences

dollars in thousands (except share data and per share data)

September 30,

Current Assets:

1 unchanged sentence

Restricted cash

Restricted deposits

Restricted deposit

Accounts receivable

10 unchanged sentences

Accounts payable

Warrants and derivatives

Total current liabilities

8 unchanged sentences

Issued and outstanding:

7,232,836 and 2,085,900 as of September 30, 2020 and December 31, 2019, respectively

12,145,547 and 7,232,836 as of March 31, 2021 and December 31, 2020, respectively

Additional paid-in capital

7 unchanged sentences

dollars in thousands (except share data and per share data)

Nine-Months Ended

September 30,

Three-Months Ended

September 30,

$ thousands (Unaudited)

Cost of revenues

5 unchanged sentences

Operating loss

Financial income (expenses), net

Other comprehensive income (loss):

Financial income, net

Other comprehensive loss:

Foreign currency translation differences

8 unchanged sentences

stockholders’

as of January 1, 2020

compensation related to options granted to employees and consultants

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

of warrants and pre funded warrants

reclassified to equity (*)

comprehensive loss

as of September 30, 2020

comprehensive

stockholders’

as of January 1, 2019

compensation related to options granted to employees and consultants

of shares to consultants

comprehensive loss

as of September 30, 2019

an amount less than $1.

AND ITS SUBSIDIARIES

Consolidated Interim Statements of Changes in Stockholders’

Equity (Cont.)

dollars in thousands (except share data and per share data)

comprehensive

stockholders’

Balance as of July 1, 2020

Balance as of January 1, 2021

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

Issuance of shares, net of issuance cost of $736

Exercise of warrants

Total comprehensive loss

Balance as of September 30, 2020

Represents an amount

less than $1.

Balance as of March 31, 2021

comprehensive

stockholders’

Balance as of July 1, 2019

Balance as of January 1, 2020

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

Issuance of shares, net of issuance cost of $358

Liability reclassified to equity

Total comprehensive loss

Balance as of September 30, 2019

accompanying notes are an integral part of the interim condensed consolidated financial statements.

Balance as of March 31, 2020

AND ITS SUBSIDIARIES

1 unchanged sentence

dollars in thousands

Nine-Months Ended

September 30,

Three-Months Ended

Cash flows from operating activities:

2 unchanged sentences

Revaluation of warrants and derivatives

Interest and revaluation of short-term deposit

Interest received from short-term deposit

Revaluation of investment in marketable securities

1 unchanged sentence

Decrease in accounts receivables

Decrease (increase) in other receivables and prepaid

(Decrease) increase in trade payable

Increase in accounts payable

Decrease in other receivables and prepaid expenses

Decrease in trade payable

(Decrease) Increase in accounts payable

Net cash used in operating activities

Cash flows from investing activities:

Proceeds from short-term deposits

(Investment in) proceeds from restricted deposits

Investment in right-of-use asset

Purchase of property and equipment

Net cash provided by (used in) investing activities

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of shares and pre-funded warrants, net of issuance costs

Proceeds from issuance of shares, net of issuance costs

Proceeds from Exercise of warrants

Net cash provided by financing activities

7 unchanged sentences

dollars in thousands (except share data and per share data)

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 smartphone and tablet apps

The technology is driven by proprietary algorithms which are able to calculate and record measurements in a variety

of novel ways.

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 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.

Company has three subsidiaries, My Size Israel 2014 Ltd.

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.

the nine month period ended September 30, 2020, the Company has incurred significant losses and negative cash flows from

operations and has an accumulated deficit of $32,951.

The Company has financed its operations mainly through fundraising

from various investors.

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 September 30, 2020, management is

of the opinion that its existing cash will be sufficient to fund operations until the end of the second quarter of 2021.

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

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.

the three month period ended March 31, 2021, the Company has incurred significant losses and negative cash flows from operations

and has an accumulated deficit of $36,128.

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

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 March 31, 2021, management is of the opinion that

its existing cash will be sufficient to fund operations until the end of March 2022.

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.

financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required

should the Company fail to operate as a going concern.

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.

financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should

the Company fail to operate as a going concern.

2 - Significant Accounting Policies

Unaudited condensed

consolidated financial statements:

accompanying unaudited condensed consolidated interim financial statements included herein have been prepared by the Company in

accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”).

The unaudited

condensed consolidated financial statements are comprised of the financial statements of the Company.

In management’s opinion,

the interim financial data presented includes all adjustments necessary for a fair presentation.

All intercompany accounts and

transactions have been eliminated.

condensed consolidated financial statements:

accompanying unaudited condensed consolidated interim financial statements included herein have been prepared by the Company in accordance

with the rules and regulations of the United States Securities and Exchange Commission (“SEC”).

The unaudited condensed consolidated

financial statements are comprised of the financial statements of the Company.

In management’s opinion, the interim financial data

presented includes all adjustments necessary for a fair presentation.

All intercompany accounts and transactions have been eliminated.

Certain information required by U.S.

generally accepted accounting principles (“GAAP”)

has been condensed or omitted in accordance with rules and regulations of the SEC.

Operating results for the nine months ended

September 30, 2020 are not necessarily indicative of the results that may be expected for any future period or for the year ending

December 31, 2020.

unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated

financial statements and the notes thereto for the year ended December 31, 2019.

Use of estimates:

preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect

the amounts reported and disclosed in the financial statements and the accompanying notes.

Actual results could differ materially

from these estimates.

AND ITS SUBSIDIARIES

to Condensed Consolidated Interim Financial Statements (unaudited)

dollars in thousands (except share data and per share data)

2 - Significant Accounting Policies (Cont.)

Functional currency:

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 that 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.

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.

As a result 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.

Size Israel’s functional currency remains the NIS.

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.

Reclassification:

amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial

These reclassifications had no effect on the previously reported net loss.

generally accepted accounting principles (“GAAP”) has been condensed or omitted in accordance

with rules and regulations of the SEC.

Operating results for the three months ended March 31, 2021 are not necessarily indicative of

the results that may be expected for any future period or for the year ending December 31, 2021.

unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial

statements and the notes thereto for the year ended December 31, 2020.

of estimates:

preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the

amounts reported and disclosed in the financial statements and the accompanying notes.

Actual results could differ materially from these

AND ITS SUBSIDIARIES

3 unchanged sentences

value of financial instruments:

Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, relating to fair value measurements,

defines fair value and established a framework for measuring fair value.

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.

In addition, the fair value of assets

and liabilities should include consideration of non-performance risk, which for the liabilities described below includes the Company’s

own credit risk.

Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines

fair value and established a framework for measuring fair value.

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.

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 risk, which for the liabilities described below includes the Company’s own credit risk.

accordance with ASC 820 when measuring the fair value, an entity shall take into account the characteristics of the asset or liability

if a market participant would take those characteristics into account when pricing the asset or liability at the measurement date.

Such characteristics include, for example:

The condition and

location of the asset.

Restrictions, if

any, on the sale or the use of the asset.

a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used

in the valuation methodologies 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

characteristics include, for example:

condition and location of the asset.

Restrictions,

if any, on the sale or the use of the asset.

a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the

valuation methodologies in measuring fair value:

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.

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.

expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably

indicative of expected future trends.

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

expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative

of expected future trends.

carrying amounts of cash and cash equivalents, accounts receivable, other receivables, trade payables and accounts payable approximate

2 unchanged sentences

company on the OTCQB.

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 assets.

September 30, 2020

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 assets.

March 31, 2021

Fair value hierarchy

1 unchanged sentence

Investment in marketable securities (*)

March 31, 2021

Fair value hierarchy

Financial liabilities

AND ITS SUBSIDIARIES

6 unchanged sentences

Investment in marketable securities (*)

December 31, 2019

Fair value hierarchy

Financial liabilities

Warrants and derivatives

For the nine and

three month periods ended September 30, 2020 and 2019, the recognized gain (loss) (based on quoted market prices with a discount

due to security restrictions on iMine shares) of the marketable securities was $18 and $3, and $(146) and $(42), respectively.

the three month period ended March 31, 2021 and 2020, the recognized gain (based on quoted market prices with a discount due to security

restrictions on iMine shares) of the marketable securities was $49 and $33, respectively.

4 - Stock Based Compensation

The stock-based expense equity

awards recognized in the financial statements for services received is related to Research and Development, Sales and Marketing

and General and Administrative expenses as shown in the following table:

Nine months ended

September 30,

stock-based expense equity awards recognized in the financial statements for services received is related to Research and Development,

Sales and Marketing and General and Administrative expenses as shown in the following table:

Three months ended

September 30,

Stock-based compensation expense - Research and Development

2 unchanged sentences

issued to consultants:

to Note 11n of the Company’s Annual Report on Form 10-K for the year ended December

In September 2020, the Company

granted additional options to a consultant (“Consultant14”) to purchase up to 22,233 shares of the Company’s

common stock.

The options are exercisable at $1.08 per share and shall vest in four equal instalments every six months starting

September 1, 2020.

Unexercised options shall expire on September 1,2025.

During the nine and three month

period ended September 30, 2020, an amount of $1 was recorded by the Company as stock option compensation expense with respect

to the option grant to Consultant14.

the nine month period ended September 30, 2020, the Company granted an aggregate of 28,233

options to consultants.

No such options were exercised and 8,338 options expired.

The total stock option compensation

expense during the nine and three month period ended September 30, 2020 and 2019 which was recorded under sales and marketing was

$8 and $3, and $70 and $10, respectively and under general and administrative was $17 and $5, and $65 and $11, respectively.

the three month period ended March 31, 2021, the Company did not grant any options to consultants, no such options were exercised

and options to purchase 1,000 shares expired.

total stock option compensation expense during the three month period ended March 31, 2021 and 2020 which was recorded under sales and

marketing was $7 and $4, respectively and under general and administrative was $0 and $6, respectively.

AND ITS SUBSIDIARIES

2 unchanged sentences

4 - Stock Based Compensation (Cont.)

issued to consultants:

On January 15, 2020,

the Company conducted a registered direct offering pursuant to which it issued 514,801 shares of its common stock and in a

concurrent private placement issued warrants to purchase up to 514,801 shares of common stock at an exercise price of $3.76

per share for gross proceeds of $2,000.

The term of the warrants are five and a half years.

The Company received net proceeds

of $1,694 after deducting placement agent fees and other offering expenses.

addition to the fees above, the Company issued to the placement agent warrants on substantially the same terms as the investors

in the offering in an amount equal to 6% of the aggregate number of shares of common stock sold in the offering, or 30,888 shares

of common stock, at an exercise price of $4.8563 per share and a term expiring on January 15, 2025.

warrants were measured at fair value of $52.

May 8, 2020 the Company completed a public offering of (i) 1,925,001 units, each unit consisting of one share of common

stock, and one warrant to purchase one share of common stock at a price of $1.10, and (ii) 2,620,453 pre-funded units,

each pre-funded unit consisting of one pre-funded warrant to purchase one share of common stock and one warrant, at a

price of $1.099 per pre-funded unit.

The net proceeds to the Company from the offering were approximately $4.3 million,

after deducting placement agent’s fees and other offering expenses payable by the Company.

warrants to purchase an aggregate of 4,545,454 shares of common stock are immediately exercisable and may be exercised

at a consideration of $1.10 per share.

The term of the warrants are five and a half years.

Pre-funded warrants were immediately

exercisable and were exercisable at a nominal consideration of $0.001 per share.

During May, 2020, the pre-funded warrants

were exercised in full and therefore are no longer outstanding.

addition to the fees above, the Company issued to the placement agent warrants on substantially the same terms as the investors

in the offering in an amount equal to 6% of the aggregate number of shares of common stock sold in the offering, or 272,727 shares

of common stock, at an exercise price of $1.375 per share and a term expiring on May 6, 2025.

warrants were measured at fair value of $160.

to the anti-dilution adjustment provisions in outstanding warrants to purchase 144,277 shares of common stock, the per share exercise

price was reduced to $0.9289, following the issuance of the securities in the public offering.

Further to Note 11a of the Company’s Annual

Report on Form 10-K for the year ended December 31, 2019:

In March 2020, warrants to purchase

up to 66,667 shares of common stock of the Company, that were not exercised, expired.

June 2020, the Company entered into a consulting agreement with a consultant pursuant to which the Company agreed upon

the three-month anniversary of the agreement to issue to the consultant a warrant to purchase up to 7,500 shares of the

Company’s common stock.

The warrant is exercisable at $1.30 per share and has a term of 18 months from the grant

the nine and three month period ended September 30, 2020, an amount of $4 and $4, respectively, was recorded by the Company

as stock option compensation expense with respect to the consultant.

MY SIZE, INC.

AND ITS SUBSIDIARIES

to Condensed Consolidated Interim Financial Statements (unaudited)

dollars in thousands (except share

data and per share data)

4 - Stock Based Compensation (Cont.)

Option Plan for Employees:

In March 2017, the Company adopted

the My Size, Inc.

2017 Equity Incentive Plan (the “2017 Employee Plan”) pursuant to which the Company’s Board

of Directors may grant stock options to officers and key employees.

The total number of options which may be granted to directors,

officers, employees under this plan, was initially limited to 200,000 shares of common stock.

Stock options can be granted with an exercise price

equal to or less than the stock’s fair market value at the grant date.

As further described below, in August 2020, the Company’s

shareholders approved an increase in the number of shares available for issuance under the Plan to 1,450,000.

On May 25, 2020, the

compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees

and directors of the Company for the purchase of an aggregate of 140,237 shares of common stock of the Company (with exercise prices

ranging between $18.15 and $9.15) to $1.04 per share, which was the closing price for the Company’s common stock on May 22,

2020, and extended the term of the foregoing options for an additional one year from the original date of expiration.

The incremental

compensation cost resulting from the repricing was $53, and the expenses during both the nine and three months ended September

30, 2020 were $47 and $4, respectively.

On August 10, 2020, the Company’s

shareholders approved an increase in the shares available for issuance under the 2017 Employee Plan from 200,000 to 1,450,000 shares.

As a result and pursuant to approval of the Company’s compensation committee that was contingent on the foregoing shareholder

approval, the following occurred on August 10, 2020:

(i) the number of shares available for issuance under the Company’s

2017 Consultant Incentive Plan was reduced from 466,667 to 216,667 shares:

(ii) the Company granted to the Company’s Chief

Executive Officer (A) a five-year options to purchase up to 160,000 ordinary shares at an exercise price of $1.04 per share.

quarter of such options vest on November 26, 2020, one quarter vest on May 26, 2021, one quarter vest on November 26, 2021 and

one quarter vest on May 26, 2022, and (B) 80,000 performance-based restricted stock units, each representing the right to receive

one share of common stock, which vest (x) upon the Company generating revenue of at least $50,000 in the Russian Federation during

the year ending 2020, or (y) upon the Company generating revenue of at least $500,000 in the Russian Federation during the year

(iii) the Company granted five-year options to purchase up to 130,000 ordinary shares to the Company’s Chief

Financial Officer at an exercise price of $1.04 per share.

One quarter of such options vest on November 26, 2020, one quarter vest

on May 26, 2021, one quarter vest on November 26, 2021 and one quarter vest on May 26, 2022;

(iv) the Company granted five-year

options to purchase up to 130,000 ordinary shares to the Company’s Chief Operating Officer and Chief Product Officer at an

exercise price of $1.04 per share.

One quarter of such options vest on November 26, 2020, one quarter vest on May 26, 2021, one

quarter vest on November 26, 2021 and one quarter vest on May 26, 2022;

(v) the Company granted five-year options to purchase up

to 325,893 ordinary shares to other employees of the Company at an exercise price of $1.04 per share.

One quarter of such options

vest on November 26, 2020, one quarter vest on May 26, 2021, one quarter vest on November 26, 2021 and one quarter vest on May

and (vi) the Company granted five-year options to purchase up to 30,000 ordinary shares to each of the Company’s

non-employee board members at an exercise price of $1.04 per share.

These options vest on November 26, 2020.

the nine and three month period ended September 30, 2020, the Company granted an aggregate of 861,999 of stock options under the

2017 Employee Plan, no such options were exercised and options to purchase 24,780 and 2,780 shares of common stock, respectively,

The total stock option compensation

expense during the nine and three month period ended September 30, 2020 and 2019 which was recorded was $312 and $209, and $432

and $124, respectively.

MY SIZE, INC.

AND ITS SUBSIDIARIES

to Condensed Consolidated Interim Financial Statements (unaudited)

dollars in thousands (except share

data and per share data)

Note 5 - Contingencies and Commitments

On August 7, 2018, the Company commenced

an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York, County of New York

for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to be determined

at trial, but in no event less than $616,000.

On August 2, 2018, North Empire filed a Summons with Notice against the Company,

also in the same Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement.

On September 6, 2018 North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018.

On September 27,

2018, North Empire filed an answer and asserted counterclaims in the action commenced by the Company against them, alleging that

the Company failed to deliver stock certificates to North Empire causing damage to North Empire in the amount of $10,958,589.

Empire also filed a third-party complaint against the Company’s CEO and now former Chairman of the Board asserting similar

claims against them in their individual capacities.

On October 17, 2018, the Company filed a reply to North Empire’s counterclaims.

On November 15, 2018, the Company’s CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s

third-party complaint.

On January 6, 2020, the Court granted the motion and dismissed the third-party complaint.

The parties are

now engaging in discovery in connection with the claims and counterclaims.

The Company believes it is more likely

than not that the counterclaims will be denied.

Further to Note 13b of the Company’s Annual Report on

Form 10-K for the year ended December 31, 2019:

On February 7, 2020, the Company received

the formal decision of the Nasdaq Hearings Panel (the “Panel”), in which the Panel determined that the Company has

evidenced full compliance with the minimum $1.00 per share bid price requirement, and granted the Company’s request for continued

listing on Nasdaq pursuant to an extension, through May 18, 2020, to demonstrate compliance with the minimum $2.5 million stockholders’

equity requirement.

On May 12, 2020, the Company received the formal decision of

the Panel, in which the Panel determined that the Company has evidenced full compliance with the minimum $2.5 million stockholders’

equity requirement.

Accordingly, the Panel has determined to continue the listing of the Company’s securities on the Nasdaq

Stock Market and closed this matter.

MY SIZE, INC.

March 2017, the Company adopted the My Size, Inc.

2017 Equity Incentive Plan (the “2017 Employee Plan”) pursuant to which

the Company’s Board of Directors may grant stock options to officers and key employees.

The total number of options which may be

granted to directors, officers, employees under this plan, was initially limited to 200,000 shares of common stock.

Stock options can

be granted with an exercise price equal to or less than the stock’s fair market value at the grant date.

As further described below,

in August 2020, the Company’s shareholders approved an increase in the number of shares available for issuance under the Plan to

May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise

price of outstanding options of employees and directors of the Company for the purchase of an aggregate of 140,237 shares of common stock

of the Company (with exercise prices ranging between $18.15 and $9.15) to $1.04 per share, which was the closing price for the Company’s

common stock on May 22, 2020, and extended the term of the foregoing options for an additional one year from the original date of expiration.

The incremental compensation cost resulting from the repricing was $53, and the expenses during three months ended March 31,

2021 and 2020 were $1 and $0, respectively.

August 10, 2020, the Company’s shareholders approved an increase in the shares available for issuance under the 2017 Employee Plan

from 200,000 to 1,450,000 shares.

As a result and pursuant to approval of the Company’s compensation committee that was contingent

on the foregoing shareholder approval, the number of shares available for issuance under the Company’s 2017 Consultant Incentive

Plan was reduced from 466,667 to 216,667 shares.

the three month period ended March 31, 2021, the Company did not grant any stock options under the 2017 Employee Plan, no such options

were exercised and options to purchase 21,610 shares of common stock expired.

total stock option compensation expense during the three month period ended March 31, 2021 and 2020 which was recorded was $136 and $60,

respectively.

AND ITS SUBSIDIARIES

to Condensed Consolidated Interim Financial Statements (unaudited)

dollars in thousands (except share

data and per share data)

Note 6 - Significant Events During the

Reporting Period

On January 15, 2020, the Company conducted a public offering of its securities pursuant to which it issued 514,801 shares of its common stock and warrants to purchase up to 514,801 shares of common stock at an exercise price of $3.76 per share for gross proceeds of $2,000.

The term of the warrants are five and a half years.

The Company received net proceeds of $1,694 after deducting placement agent fees and other offering expenses.

On May 8, 2020, the Company conducted a

public offering of its securities pursuant to which it issued 1,925,001 shares of its common stock, pre funded warrants to purchase

up to 2,620,453 shares of common stock at an exercise price of $0.001 per share and five-year warrants to purchase up to 4,545,454

shares of common stock at an exercise price of $1.10 per share for gross proceeds of $5,000.

The net proceeds to the Company from

the offering were approximately $4,300, after deducting placement agent’s fees and other offering expenses payable by the

In addition, the Company issued to the placement agent five-year placement agent warrants to purchase 272,727 shares of

common stock at an exercise price of $1.375 per share.

dollars in thousands (except share data and per share data)

5 - Contingencies and Commitments

August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the

State of New York, County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is

seeking damages in an amount to be determined at trial, but in no event less than $616,000.

On August 2, 2018, North Empire filed

a Summons with Notice against the Company, also in the same Court, in which they allege damages in an amount of $11.4 million arising

from an alleged breach of the Agreement.

On September 6, 2018 North Empire filed a Notice of Discontinuance of the action it had

filed on August 2, 2018.

On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by

the Company against them, alleging that the Company failed to deliver stock certificates to North Empire causing damage to North

Empire in the amount of $10,958,589.

North Empire also filed a third-party complaint against the Company’s CEO and now former

Chairman of the Board asserting similar claims against them in their individual capacities.

On October 17, 2018, the Company filed

a reply to North Empire’s counterclaims.

On November 15, 2018, the Company’s CEO and now former Chairman of the Board

filed a motion to dismiss North Empire’s third-party complaint.

On January 6, 2020, the Court granted the motion and dismissed

the third-party complaint.

Discovery has been completed and both parties have filed motions for summary judgment in connection with

the claims and counterclaims.

Company believes it is more likely than not that the counterclaims will be denied.

6 - Significant Events During the Reporting Period

January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 1,569,179 shares of its common

stock for gross proceeds of $2,008.

The net proceeds to the Company from the offering were approximately $1,700, after deducting

placement agent’s fees and other estimated offering expenses payable by the Company.

January and February 2021, a holder of warrants exercised warrants to purchase 725,000 ordinary shares of the Company in exchange

March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 2,618,532 shares

of its common stock for gross proceeds of $3,300.

The net proceeds to the Company from the offering were approximately $2,872, after

deducting placement agent’s fees and other estimated offering expenses payable by the Company.

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

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

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.

countries around the world, including in Israel, have from time to time 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.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations.

The following discussion

and analysis provides information that we believe to be relevant to an assessment and understanding of our results of operations

and financial condition for the periods described.

This discussion should be read together with our condensed consolidated interim

financial statements and the notes to the financial statements, which are included in this Quarterly Report on Form 10-Q.

information should also be read in conjunction with the information contained in our Annual Report on Form 10-K for the year ended

December 31, 2019, filed with the Securities and Exchange Commission on March 19, 2020, or the Annual Report, including the consolidated

annual financial statements as of December 31, 2019 and their accompanying notes included therein.

This Quarterly Report

on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended,

or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended.

Any statements in this Quarterly Report

on Form 10-Q about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical

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.

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.

Note 7 - Events Subsequent to the balance sheet

On May 7, 2021, the Company

closed on the sale of an additional 392,780 shares of the Company’s common stock in connection with the full exercise of the

underwriter’s overallotment option granted in the Company’s March 2021 public offering.

These additional shares were

sold to the underwriter at a public offering price of $1.26 per share, resulting in additional net proceeds to the Company, net

of the underwriting discount, of approximately $460.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

following discussion and analysis provides information that we believe to be relevant to an assessment and understanding of our results

of operations and financial condition for the periods described.

This discussion should be read together with our condensed consolidated

interim financial statements and the notes to the financial statements, which are included in this Quarterly Report on Form 10-Q.

information should also be read in conjunction with the information contained in our Annual Report on Form 10-K for the year ended December

31, 2020, filed with the Securities and Exchange Commission on March 29, 2021, or the Annual Report, including the consolidated annual

financial statements as of December 31, 2020 and their accompanying notes included therein.

Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of

1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended.

Any statements in this Quarterly

Report on Form 10-Q about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical

facts and are forward-looking statements.

These statements are often, but not always, made through the use of words or phrases

such as “believe,”

These statements are often, but not always, made through the use of words or phrases such as

“believe,”

“will,”

5 unchanged sentences

and “would.”

For example, statements concerning financial condition, possible or assumed future

results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock

and future management and organizational structure are all forward-looking statements.

Forward-looking statements are not guarantees

of performance.

They involve known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity,

performance or achievements to differ materially from any results, levels of activity, performance or achievements expressed or

implied by any forward-looking statement.

Any forward-looking

statements are qualified in their entirety by reference to the risk factors discussed throughout this Quarterly Report on Form

Some of the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections

contained in the forward-looking statements include but are not limited to:

our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;

our ability to continue as a going concern;

risks related

to the COVID-19 pandemic;

the new and unproven nature of the measurement technology markets;

our ability to achieve customer adoption of our products;

our dependence on assets we purchased from a related party and the risk that such assets may in the future be repurchased;

our ability to enhance our brand and increase market awareness;

our ability to introduce new products and continually enhance our product offerings;

the success of our strategic relationships with third parties;

information technology system failures or breaches of our network security;

competition from competitors;

our reliance on key members of our management team;

current or future litigation;

the impact of the political and security situation in Israel on our business;

our ability to remain listed on the Nasdaq Capital Market.

The foregoing list

sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forward-looking

For example, statements concerning financial condition, possible or assumed future results

of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future management

and organizational structure are all forward-looking statements.

Forward-looking statements are not guarantees of performance.

known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements

to differ materially from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement.

forward-looking statements are qualified in their entirety by reference to the risk factors discussed throughout this Quarterly Report

on Form 10-Q.

Some of the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or

projections contained in the forward-looking statements include but are not limited to:

history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable

terms, or at all;

ability to continue as a going concern;

related to the COVID-19 pandemic;

new and unproven nature of the measurement technology markets;

ability to achieve customer adoption of our products;

dependence on assets we purchased from a related party and the risk that such assets may in the future be repurchased;

ability to enhance our brand and increase market awareness;

ability to introduce new products and continually enhance our product offerings;

success of our strategic relationships with third parties;

technology system failures or breaches of our network security;

from competitors;

reliance on key members of our management team;

or future litigation;

impact of the political and security situation in Israel on our business.

foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forward-looking

You should read this Quarterly Report on Form 10-Q and the documents that we reference herein and have filed as exhibits

1 unchanged sentence

from what we expect.

You should assume that the information appearing in this Quarterly Report on Form 10-Q is accurate as of the

Because the risk factors referred to on page 12 of our Annual Report, could cause actual results or outcomes to differ

materially from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance

on any forward-looking statements.

Further, any forward-looking statement speaks only as of the date on which it is made, and we

undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the

statement is made or to reflect the occurrence of unanticipated events.

New factors emerge from time to time, and it is not possible

for us to predict which factors will arise.

In addition, we cannot assess the impact of each factor on our business or the extent

to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking

We qualify all of the information presented in this Quarterly Report on Form 10-Q, and particularly our forward-looking

statements, by these cautionary statements.

Unless the context

otherwise requires, all references to “we,”

You should assume that the information appearing in this Quarterly Report on Form 10-Q is accurate as of the date

Because the risk factors referred to on page 12 of our Annual Report, could cause actual results or outcomes to differ materially

from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking

Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to

update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the

occurrence of unanticipated events.

New factors emerge from time to time, and it is not possible for us to predict which factors will

In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors,

may cause actual results to differ materially from those contained in any forward-looking statements.

We qualify all of the information

presented in this Quarterly Report on Form 10-Q, and particularly our forward-looking statements, by these cautionary statements.

the context otherwise requires, all references to “we,”

“us,”

1 unchanged sentence

or “the Company”

Quarterly Report on Form 10-Q are to My Size, Inc.

a Delaware corporation, and its subsidiaries, including MySize Israel 2014 Ltd.

in this Quarterly Report on Form 10-Q are to My Size, Inc.

a Delaware corporation, and its subsidiaries, including MySize Israel 2014

Ltd, Topspin Medical (Israel) Ltd and My Size LLC.

taken as a whole.

We are a creator of

mobile device measurement solutions that has developed innovative solutions designed to address shortcomings in multiple verticals,

including the e-commerce fashion/apparel, shipping/parcel and do it yourself, or DIY, industries.

Utilizing our sophisticated algorithms

within our proprietary technology, we can calculate and record measurements in a variety of novel ways, and most importantly, increase

revenue for businesses across the globe.

Our solutions can be

utilized to accurately take measurements of a variety of items via a mobile device.

By downloading the application to a smartphone,

the user is then able to run the mobile device over the surface of an item the user wishes to measure.

The information is then

automatically sent to a cloud-based server where the dimensions are calculated through our proprietary algorithms, and the accurate

are a creator of mobile device measurement solutions that has developed innovative solutions designed to address shortcomings in multiple

verticals, including the e-commerce fashion/apparel, shipping/parcel and do it yourself, or DIY, industries.

Utilizing our sophisticated

algorithms within our proprietary technology, we can calculate and record measurements in a variety of novel ways, and most importantly,

increase revenue for businesses across the globe.

solutions can be utilized to accurately take measurements of a variety of items via a mobile device.

By downloading the application to

a smartphone, the user is then able to run the mobile device over the surface of an item the user wishes to measure.

The information

is then automatically sent to a cloud-based server where the dimensions are calculated through our proprietary algorithms, and the accurate

measurements (+ or - 2 centimeters) are then sent back to the user’s mobile device.

1 unchanged sentence

for this technology are significant in many areas.

Currently, we are mainly focusing on the

e-commerce fashion/apparel industry.

In addition, our solutions address the shipping/parcel and DIY uses markets.

We are in the

commercialization phase of our products, although we have only generated minimal revenues to date.

MySizeID has been

incorporated into a number of major retailers including DeMoulin, U.S.

Polo Assn., Slam, Refrigiwear, Tricorp, Nocturne and

MySizeID is also available on leading e-commerce websites including WooCommerce, Shopify and Lightspeed.

In recent months, we

announced an increase in online apparel sales and reduction in returns of online orders of Penti customers utilizing

we opened a subsidiary in

two French retail brands, La Pièce and Habillez-moi, are integrating MySizeID into their e-commerce websites;

we integrated MySizeID into Sweet Fit, a virtual fitting mirror;

we received a notice of allowance from the USPTO for our

patent application, titled:

“A system for and a method of measuring a path length using a handheld electronic

device”;

we hired two new sales executives in France;

we developed a custom clothing made-to-measure and contactless

shopping features for the MySizeID application;

we released the new OneClick feature for the BoxSize application;

received a notice of allowance from the Russian Patent & Trademark Office for our patent application, titled:

system for and a method of measuring a path length using a handheld electronic device.”

While we rollout

our products to major retailers and apparel companies, there is a lead time for new customers to ramp up before we can

recognize revenue.

This lead time varies between customers, especially when the customer is a tier 1 retailer, where the

integration process may take longer.

Generally, first we integrate our product into a customer’s online platform, which

is followed by piloting and implementation, and, assuming we are successful, commercial roll-out, all of which takes time

before we expect it to impact our financial results in a meaningful way.

While we have begun generating initial sales

revenue, we do not expect to generate meaningful revenue during the upcoming quarters.

In addition, the COVID-19 pandemic has

had a particularly adverse impact on the retail industry and this has resulted in an adverse impact on our marketing and

sales activities.

For example, we have three ongoing pilots with international retailers that have been halted, we are unable

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

instances sales processes have been delayed or cancelled.

Because of the numerous risks and uncertainties associated with the

COVID-19 pandemic, the success of our market penetration and our dependence on the extent to which MySizeID is adopted and

utilized, we are unable to predict the extent to which we will recognize revenue.

We may be unable to successfully develop or

market any of our current or proposed products or technologies, those products or technologies may not generate any revenues,

and any revenues generated may not be sufficient for us to become profitable or thereafter maintain profitability.

We recently entered

into a non-binding letter of intent with Logystico LLC, or Logystico, a third party logistics fulfillment company that specializes

in automating the order fulfillment process, to form a joint venture.

Under the terms of the letter of intent, the joint venture

will exclusively operate and manage micro-fulfilment centers using our BoxSize platform for retail vendors in the United States

and we will initially have a 68% stake and Logystico will initially have a 32% stake in the joint venture entity.

Establishment

of the joint venture is subject to the entry into a definitive binding agreement.

Important Information about COVID-19

In late 2019, a

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

we are mainly focusing on the e-commerce fashion/apparel industry.

In addition, our solutions address the shipping/parcel and DIY uses

we rollout our products to major retailers and apparel companies, there is a lead time for new customers to ramp up before we can recognize

This lead time varies between customers, especially when the customer is a tier 1 retailer, where the integration process may

Generally, first we integrate our product into a customer’s online platform, which is followed by piloting and implementation,

and, assuming we are successful, commercial roll-out, all of which takes time before we expect it to impact our financial results in

a meaningful way.

While we have begun generating initial sales revenue, we do not expect to generate meaningful revenue during the upcoming

Because of the numerous risks and uncertainties associated with the success of our market penetration and our dependence on

the extent to which MySizeID is adopted and utilized, we are unable to predict the extent to which we will recognize revenue.

be unable to successfully develop or market any of our current or proposed products or technologies, those products or technologies may

not generate any revenues, and any revenues generated may not be sufficient for us to become profitable or thereafter maintain profitability.

Information about COVID-19

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.

countries around the world, including in Israel, have significant governmental measures 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.

Many countries

around the world, including in Israel, have from time to time significant governmental measures 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.

implemented remote working and work place protocols for our employees in accordance with Israeli government requirements.

addition, while we have 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 our marketing and sales activities.

For example, we have

three ongoing pilots with international retailers that have been halted, we are unable to participate physically in industry

conferences, our 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 our 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.

May 2020 Public Offering

On May 8, 2020, we

completed a public offering of (i) 1,925,001 units, each unit consisting of one share of common stock and one warrant to purchase

one share of common stock at a price of $1.10, and (ii) 2,620,453 pre-funded units, each pre-funded unit consisting of one pre-funded

warrant to purchase one share of common stock and one warrant, at a price of $1.099 per pre-funded unit.

In connection with the

public offering, we issued warrants to purchase an aggregate of 4,545,454 shares of common stock.

The warrants have an exercise

price of $1.10 per share of common stock, are exercisable upon issuance and will expire five years from the date of issuance.

exercise price of the warrants is subject to adjustment for stock splits, reverse splits, and similar capital transactions as described

in the warrants.

The pre-funded warrants

were immediately exercisable and was exercisable at a nominal consideration of $0.001 per share of common stock any time until

all of the pre-funded warrants are exercised in full.

During May 2020, all pre-funded warrants were exercised.

A holder will not

have the right to exercise any portion of the warrants if the holder (together with its affiliates) would beneficially own in excess

of 4.99% (or, at the election of the holder, 9.99%) of the number of shares of common stock outstanding immediately after giving

effect to the exercise, as such percentage ownership is determined in accordance with the terms of the warrants.

However, any holder

may increase or decrease such percentage to any other percentage not in excess of 9.99% upon notice to us, provided that any increase

in such percentage shall not be effective until 61 days after such notice.

The net proceeds from

the public offering were approximately $4.3 million, after deducting placement agent’s fees and other estimated offering

expenses payable by us.

In connection with

the public offering, we paid the placement agent a fees and expenses of $517,900 and issued to the placement agent’s designees

placement agent warrants to purchase up to 272,727 shares of common stock.

The placement agent warrants are substantially the same

terms as the warrants, except they have an exercise price equal to 125% of the per share purchase price, or $1.375 per share, and

expire on the five year anniversary of the effective date of the registration statement.

Pursuant to the anti-dilution

adjustment provisions in outstanding warrants to purchase 144,277 shares of common stock, the per share exercise price was reduced

to $0.9289, following the issuance of the securities in the public offering.

Reverse Stock Split

We implemented a 1-for-15

reverse stock split of our outstanding shares of common stock that was effective for Nasdaq Capital Market purposes at the open

of business on November 19, 2019.

All share and related option and warrant information presented in this prospectus supplement

have been retroactively adjusted to reflect the reduced number of shares and the increase in the share price which resulted from

Results of Operations

The table below provides

our results of operations for the periods indicated.

We implemented remote working

and work place protocols for our employees in accordance with Israeli government requirements.

In addition, while we have 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 our marketing and sales activities.

For example, we have three ongoing pilots with international retailers that have been halted,

we are unable to participate physically in industry conferences, our 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 our 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.

of Operations

table below provides our results of operations for the periods indicated.

Three months ended

Nine months ended

(dollars in thousands)

Cost of revenues

Research and development expenses

Sales and marketing

General and administrative

Operating loss

Financial income (expenses), net

Nine and Three Months Ended September

30, 2020 Compared to Nine and Three Months Ended September 30, 2019

From inception through

December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses to

increase our sales and marketing efforts and to perform further research and development activities.

We started to generate revenues

only in 2019.

Our revenues for the nine months ended September 30, 2020 amounted to $139,000 compared to $31,000 for the nine months

ended September 30, 2019.

Our revenues for the

three months ended September 30, 2020 amounted to $88,000 compared to $6,000 for the three months ended September 30, 2019.

increase from both the nine and three month corresponding period primarily resulted from increase in traffic, as measured by the

MySizeID engine under the license agreements with customers and from fees from customer projects.

Research and Development Expenses

Our research and development

expenses for the nine months ended September 30, 2020 amounted to $1,085,000 compared to $1,066,000 for the nine months ended September

Our research and development

expenses for the three months ended September 30, 2020 amounted to $397,000 compared to $395,000 for the three months ended September

Sales and marketing expenses

Our sales and marketing

expenses for the nine months ended September 30, 2020 amounted to $1,632,000 compared to $1,387,000 for the nine months ended September

The increase in comparison with the corresponding period was mainly due to an increase in marketing consultants and hiring

new sales consultants offset by a decrease in travel expenses.

Our sales and marketing

expenses for the three months ended September 30, 2020 amounted to $555,000 compared to $526,000 for the three months ended September

The increase in comparison with the corresponding period was mainly due to an increase in marketing consultants and hiring

new sales consultants and increase in marketing offset by a decrease in travel expenses.

General and administrative expenses

Our general and administrative

expenses for the nine months ended September 30, 2020 amounted to $1,855,000 compared to $2,002,000 for the nine months ended September

The decrease in comparison with the corresponding period was mainly due to a decrease in payroll expenses and share-based

payments offset by an increase in insurance expenses.

Our general and administrative

expenses for the three months ended September 30, 2020 amounted to $777,000 compared to $684,000 for the three months ended September

The decrease in comparison with the corresponding period was mainly due to a decrease in payroll expenses and share-based

payments offset by an increase in insurance expenses.

Operating loss

As a result of the

foregoing, for the nine months ended September 30, 2020, our operating loss was $4,435,000, an increase of $10,000, or 0.2%, compared

to our operating loss for nine months ended September 30, 2019 of $4,425,000.

As a result of the

foregoing, for the three months ended September 30, 2020, our operating loss was $1,642,000, an increase of $43,000, or 2.7%, compared

to our operating loss for the three months ended September 30, 2019 of $1,599,000.

Financial Income (Expenses), Net

Our financial expenses,

net for the nine months ended September 30, 2020 amounted to $2,000 as opposed to financial income of $182,000 for the nine months

ended September 30, 2019.

During the nine months ended September 30, 2020, we had financial expenses mainly from exchange rate

differences offset by financial income mainly from revaluation of investment in marketable securities whereas in the corresponding

period we had financial income of $67,000 primarily due to revaluation of warrants offset by financial income mainly from exchange

rate differences and revaluation of investment in marketable securities.

Our financial expenses,

net for the three months ended September 30, 2020 amounted to $32,000 compared to financial income of $249,000 for the three months

ended September 30, 2019.

During the three months ended September 30, 2020, we had financial expenses mainly from hedging activities

and exchange rate differences whereas in the corresponding period we had financial income primarily due to the revaluation of warrants.

As a result of the

foregoing research and development, sales and marketing, general and administrative expenses initial revenues, and financial expenses,

our net loss for the nine months ended September 30, 2020 was $4,437,000, compared to net loss of $4,243,000 for the nine months

ended September 30, 2019, the increase in the net loss was mainly due to the reasons mentioned above.

As a result of the

foregoing research and development, sales and marketing, general and administrative expenses initial revenues, and financial expenses,

our net loss for the three months ended September 30, 2020 was $1,674,000, compared to net loss of $1,350,000 for the three months

ended September 30, 2019, the increase in the net loss was mainly due to the reasons mentioned above.

Liquidity and Capital Resources

Since our inception,

we have funded our operations primarily through public and private offerings of debt and equity in the State of Israel and in the

As of September 30,

2020, we had cash, cash equivalents, restricted cash and restricted deposits of $3,786,000 compared to $1,466,000 of cash, cash

equivalents and restricted cash as of December 31, 2019.

This increase primarily resulted from the registered direct offering and

concurrent private placement resulting in net proceeds of $1,694,000 that was conducted in January 2020 and a public offering that

resulted in net proceeds of $4,300,000 that was conducted in May 2020 offset by our operating activities.

On September 13, 2019,

we entered into an At the Market Offering Agreement with H.C.

Wainwright, LLC or Wainwright.

According to the agreement, we may

offer and sell, from time to time, our shares of common stock having an aggregate offering price of up to $5.5 million through

Wainwright or the ATM Prospectus Supplement.

From September 13, 2019 until January 15, 2020, we issued 87,756 shares of common

stock at an average price of $4.77 per share through the ATM Prospectus Supplement, resulting in net proceeds of $418,524.

a commission equal to 3% of the gross proceeds from the sale of our shares of common stock under the ATM Prospectus Supplement.

On January 15, 2020, we terminated the ATM Prospectus Supplement, but the offering agreement remains in full force and effect.

Cash used in operating

activities amounted to $3,791,000 for the nine months ended September 30, 2020, compared to $4,082,000 for the nine months ended

September 30, 2019.

The decrease in cash used in operating activities was mainly due to revaluation of warrants and derivatives

in the corresponding period.

Net cash used in investing

activities was $209,000 for the nine months ended September 30, 2020, compared to cash used in investing activities of $1,360,000

for the nine months ended September 30, 2019.

The change from the corresponding period was mainly due to increase in restricted

deposits compared with proceeds from restricted deposits and from short term deposits in the corresponding period.

Net cash provided by

financing activities was $6,094,000 for the nine months ended September 30, 2020, compared to none for the nine months ended September

The cash flow from financing activities for the nine months ended September 30, 2020 resulted from the registered direct

offering and concurrent private placement of our securities in January 2020 and the public offering of our securities in May 2020.

We do not have any

material commitments for capital expenditures during the next twelve months.

We expect to continue

to generate losses and negative cash flows from operations for the foreseeable future and expect to need to obtain additional funds

in the future.

Based on the projected cash flows and cash balances as of September 30, 2020, management is of the opinion that

our existing cash will be sufficient to fund operations until the end of second quarter 2021.

As a result, there is substantial

doubt about the Company’s ability to continue as a going concern.

However, we will need to raise additional capital, which

may not be available on reasonable terms or at all.

Financial income, net

Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020

started to generate revenue in 2019 and we expect to incur additional losses to increase our sales and marketing efforts and to perform

further research and development activities.

Our revenues for the three months ended March 31, 2021 amounted to $27,000 compared to $30,000

for the three months ended March 31, 2020.

and Development Expenses

research and development expenses for the three months ended March 31, 2021 amounted to $373,000 compared to $348,000 for the three months

ended March 31, 2020.

The increase in comparison with the corresponding period was mainly due to an increase in shared based expenses.

and Marketing Expenses

sales and marketing expenses for the three months ended March 31, 2021 amounted to $546,000 compared to $625,000 for the three months

ended March 31, 2020.

The decrease in comparison with the corresponding period was mainly due to a decrease in digital marketing and

a decrease in travel expenses.

and Administrative Expenses

general and administrative expenses for the three months ended March 31, 2021 amounted to $624,000 compared to $516,000 for the three

months ended March 31, 2020.

The increase in comparison with the corresponding period was mainly due to an increase in share-based payments,

professional services and insurance expenses.

a result of the foregoing, for the three months ended March 31, 2021, our operating loss was $1,516,000, an increase of $56,000, or 3.8%,

compared to our operating loss for the three months ended March 31, 2020 of $1,460,000.

financial income, net for the three months ended March 31, 2021 amounted to $59,000 compared to financial income of $1,000 for the three

months ended March 31, 2020.

The increase in comparison with the corresponding period was mainly due to revaluation of investment in

marketable securities.

a result of the foregoing research and development, sales and marketing, general and administrative expenses net of revenues, and financial

income, our net loss for the three months ended March 31, 2021 was $1,457,000, compared to net loss of $1,459,000 for the three months

ended March 31, 2020.

and Capital Resources

our inception, we have funded our operations primarily through public and private offerings of debt and equity in the State of Israel

and in the U.S.

of March 31, 2021, we had cash, cash equivalents, restricted cash and restricted deposits of $6,023,000 compared to $1,958,000 of cash,

cash equivalents and restricted cash as of December 31, 2020.

This increase primarily resulted from the public offerings that we completed

in January and March 2021 and proceeds from warrants that were exercised, as further described below.

March 25, 2021, we completed an underwritten public offering of our common stock pursuant to which we issued 2,618,532 shares of our

common stock at a public offering price of $1.26 per share for gross proceeds of approximately $3,300,000.

net proceeds of approximately $2,872,000, after deducting the underwriting discounts and commissions and estimated offering expenses.

On May 7, 2021, we closed on the sale of an additional 392,780 shares of our common stock in connection with the full exercise of

the underwriters’

underwriter’s overallotment option granted in the March 2021 public offering.

These additional shares were

sold to the underwriter at a public offering price of $1.26 per share, resulting in additional net proceeds, after deducting the underwriting

discount, of approximately $460,260.

Prior to that, on January 8, 2021, we completed an underwritten public offering of our common stock pursuant to which we issued 1,569,179

shares of our common stock at a public offering price of $1.28 per share for gross proceeds of approximately $2,008,000.

net proceeds of approximately $1,700,000, after deducting the underwriting discounts and commissions and estimated offering expenses.

Furthermore, in January and February 2021, a holder of warrants exercised warrants to purchase 725,000 of our ordinary shares in exchange

for $797,000.

used in operating activities amounted to $1,271,000 for the three months ended March 31, 2021, compared to $1,436,000 for the three months

ended March 31, 2020.

The decrease in cash used in operating activities was mainly due to revaluation of investment in marketable securities,

share based payments and working capital.

cash used in investing activities was $3,000 for the three months ended March 31, 2021, compared to cash used in investing activities

of $27,000 for the three months ended March 31, 2020.

The decrease from the corresponding period was mainly due to investment in right-of-use

asset in the corresponding period compared to no investment in the current period.

cash provided by financing activities was $5,369,000 for the three months ended March 31, 2021, compared to $1,694,000 for the three

months ended March 31, 2020.

The cash flow from financing activities for the three months ended March 31, 2021 resulted from the public

offerings that occurred in January 2021 and March 2021 and from proceeds that were received from an investor for warrants that

were exercised.

do not have any material commitments for capital expenditures during the next twelve months.

expect to continue to generate losses and negative cash flows from operations for the foreseeable future and expect to need to obtain

additional funds in the future.

Based on the projected cash flows and cash balances as of March 31, 2021, management is of the opinion

that our existing cash will be sufficient to fund operations until the end of March 2022.

As a result, there is substantial doubt

about the Company’s ability to continue as a going concern.

However, we will need to raise additional capital, which may not be

available on reasonable terms or at all.

Additional capital would be used to accomplish the following:

finance our current operating expenses;

pursue growth opportunities;

hire and retain qualified management and key employees;

respond to competitive pressures;

comply with regulatory requirements;

maintain compliance with applicable laws and exchange rules.

Current conditions

in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available

our current operating expenses;

growth opportunities;

and retain qualified management and key employees;

to competitive pressures;

with regulatory requirements;

compliance with applicable laws and exchange rules.

conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available

only on unfavorable terms.

Our ability to raise additional capital, if needed, will depend on conditions in the capital markets,

the COVID-19 pandemic, economic conditions and a number of other factors, many of which are outside our control, and on our financial

Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms

that are acceptable to us.

If we cannot raise additional capital when needed, it may have a material adverse effect on our business,

results of operations and financial condition.

To the extent that

we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result

in substantial dilution for our current stockholders.

The terms of any securities issued by us in future capital transactions may

be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative

Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, the

COVID-19 pandemic, economic conditions and a number of other factors, many of which are outside our control, and on our financial performance.

Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable

If we cannot raise additional capital when needed, it may have a material adverse effect on our business, results of operations

and financial condition.

the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities

could result in substantial dilution for our current stockholders.

The terms of any securities issued by us in future capital transactions

may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative

securities, which may have a further dilutive effect on the holders of any of our securities then-outstanding.

We may issue additional

shares of our common stock or securities convertible into or exchangeable or exercisable for our common stock in connection with

hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capital-raising

or other business purposes.

The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance,

may cause the market price of our common stock to decline and existing stockholders may not agree with our financing plans or the

terms of such financings.

In addition, we may incur substantial costs in pursuing future capital financing, including investment

banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs.

We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes

and warrants, which may adversely impact our financial condition.

Furthermore, any additional debt or equity financing that we

may need may not be available on terms favorable to us, or at all.

If we are unable to obtain such additional financing on a timely

basis, we may have to curtail our development activities and growth plans and/or be forced to sell assets, perhaps on unfavorable

terms, or we may have to cease our operations, which would have a material adverse effect on our business, results of operations

and financial condition.

Off-Balance Sheet Arrangements

We have not entered

into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivative

instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations

under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.

Functional Currency

We reassessed our 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 that date.

In 2019, we went through a strategic shift which involved a

significant change in our business model, that clearly indicates that the functional currency has changed, beginning January 2020.

In previous years, we acted as a platform to fund our operational subsidiary, My Size Israel 2014 Ltd., which conducts our research

and development activities in NIS.

Accordingly, we has not been substantially focused on our operating activities for that period.

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

would be the apparel market in the US.

Consequently, we established marketing and distribution channels in the US along with having

a new pricing model denominated in USD.

Throughout 2019, we hired sales personnel which are based in the US and signed agreements

with customers for which we began generating revenue in USD for the first time since it began its operations.

Accordingly, by the

end of 2019, we are 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.

As a result of being an operational company that enters into operational

agreements and generates revenues on an ongoing basis, our management has concluded that as of January 1 2020, the currency that

most faithfully portrays the economic results of our operations is the U.S.

My Size Israel 2014

Ltd.’s functional currency remains the NIS.

Our presentation currency

of the financial statements was and continues to remain U.S.

Our functional currency of our

Russian subsidiary, My Size LLC, is the Russian ruble.

Application of Critical Accounting Policies

and Estimates

Our management’s

discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have

prepared in accordance with U.S.

shares of our common stock or securities convertible into or exchangeable or exercisable for our common stock in connection with hiring

or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capital-raising or

other business purposes.

The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may

cause the market price of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of

such financings.

In addition, we may incur substantial costs in pursuing future capital financing, including investment banking fees,

legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs.

We may also be required

to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely

impact our financial condition.

Furthermore, any additional debt or equity financing that we may need may not be available on terms favorable

to us, or at all.

If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities

and growth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have

a material adverse effect on our business, results of operations and financial condition.

Sheet Arrangements

have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests,

derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other

obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit risk

of Critical Accounting Policies and Estimates

management’s discussion and analysis of our financial condition and results of operations is based on our financial statements,

which we have prepared in accordance with U.S.

generally accepted accounting principles.

The preparation of these financial statements requires

us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent

The preparation of these financial statements

requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent

assets and liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods.

Actual results may differ from these estimates under different assumptions or conditions.

While our significant

accounting policies are more fully described in the notes to our financial statements appearing elsewhere in this report, we believe

that the accounting policies discussed below are critical to our financial results and to the understanding of our past and future

performance, as these policies relate to the more significant areas involving management’s estimates and assumptions.

results may differ from these estimates under different assumptions or conditions.

our significant accounting policies are more fully described in the notes to our financial statements appearing elsewhere in this report,

we believe that the accounting policies discussed below are critical to our financial results and to the understanding of our past and

future performance, as these policies relate to the more significant areas involving management’s estimates and assumptions.

consider an accounting estimate to be critical if:

(1) it requires us to make assumptions because information was not available

at the time or it included matters that were highly uncertain at the time we were making our estimate;

and (2) changes in the estimate

could have a material impact on our financial condition or results of operations.

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.

The Company has adopted the standard effective January 1, 2018.

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.

Revenue is recognized

when a contract exists between the Company and a customer (business) and upon transfer of control of promised products or services

to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services.

Company enters into contracts that can include various combinations of products and services, which may be capable of being distinct

(1) it requires us to make assumptions because information was not available at the

time or it included matters that were highly uncertain at the time we were making our estimate;

and (2) changes in the estimate could

have a material impact on our financial condition or results of operations.

from Contracts with Customers

Company implemented ASC 606, Revenue from Contract with Customers.

recognize revenue under ASC 606, the Company applies the following five steps:

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.

Company’s revenue is derived from the sale of cloud-enabled software subscriptions, associated software maintenance and support.

is recognized when a contract exists between the Company and a customer (business) and upon transfer of control of promised products

or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services.

The Company enters into contracts that can include various combinations of products and services, which may be capable of being distinct

and accounted for as separate performance obligations.

2 unchanged sentences

manner as the subscription services.

Product, Subscription and 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.

Subscription and Services Offerings

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

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

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.

Equity-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.

We recorded stock options

issued to non-employees at fair value, remeasured to reflect the current fair value at each reporting period and recognized expenses

over the service period.

The Company elected to early implement ASU 2018-07, Stock Compensation:

Improvements to Nonemployee stock-Based

Payment Accounting, from October 1, 2018.

In accordance with

ASU 2018-07, we measured stock options at the implementation date and reclassified the stock based payments from a liability stock-based

payments awards to equity stock-based payments awards.

The fair value as of the implementation date will be recognized over the

remaining service period.

We estimate share option grant date fair value using the Binomial option-pricing model.

The expected volatility

of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative of expected

future trends.

The risk-free interest

rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield from US treasury

zero-coupon bonds with an equivalent term.

The Company has historically

not paid dividends and has no foreseeable plans to pay dividends.

Quantitative and Qualitative Disclosure About Market

Not required for a

smaller reporting company.

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.

Quantitative and Qualitative Disclosure About Market Risk.

required for a smaller reporting company.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements