What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-15 compared with 2021-08-16 · 99 added, 86 removed, 226 unchanged (45% of the section changed)

85 unchanged sentences

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.

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.

In 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 spread globally.

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

These measures have resulted in work stoppages and other disruptions.

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.

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

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Three months ended

Six months ended

Nine months ended

(dollars in thousands)

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Financial income (expenses), net

and Three Months Ended June 30, 2021 Compared to Six and Three Months Ended June 30, 2020

and Three Months Ended September 30, 2021 Compared to Nine and Three Months Ended September 30, 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 six months ended June 30, 2021 amounted to $57,000 compared to $51,000

for the six months ended June 30, 2020.

revenues for the three months ended June 30, 2021 amounted to $30,000 compared to $21,000 for the three months ended June 30, 2020.

increase from both six and three months corresponding period primarily resulted from increase in traffic, as measured by the MySizeID

engine per the license agreements.

Our revenues for the nine months ended September 30, 2021 amounted to $88,000 compared to

$139,000 for the nine months ended September 30, 2020.

revenues for the three months ended September 30, 2021 amounted to $31,000 compared to $88,000 for the three months ended September 30,

The decrease in both nine and three months corresponding period primarily resulted from fees from customer projects in the

corresponding period compared to none during the nine and three month ended September 30, 2021, offset by increase in traffic, as measured

by the MySizeID engine per its license agreements.

and Development Expenses

research and development expenses for the six months ended June 30, 2021 amounted to $3,380,000 compared to $688,000 for the six months

ended June 30, 2020.

The increase from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed

to the share issuance to Shoshana Zigdon under that certain Amendment to Purchase Agreement dated May 26, 2021.

research and development expenses for the three months ended June 30, 2021 amounted to $3,007,000 compared to $340,000 for the three

months ended June 30, 2020.

The increase from the corresponding period primarily resulted from share based payment in amount of $2,618,000

attributed to the share issuance to Shoshana Zigdon under that certain Amendment to Purchase Agreement dated May 26, 2021.

research and development expenses for the nine months ended September 30, 2021 amounted to $3,842,000 compared to $1,085,000 for the

nine months ended September 30, 2020.

The increase from the corresponding period primarily resulted from share based payment in amount

of $2,618,000 attributed to the share issuance to Shoshana Zigdon under that certain Amendment to Purchase Agreement dated May 26, 2021.

research and development expenses for the three months ended September 30, 2021 amounted to $462,000 compared to $397,000 for the three

months ended September 30, 2020.

The increase from the corresponding period primarily resulted from the hiring of new employees and increase

in expenses to subcontractors.

and Marketing Expenses

sales and marketing expenses for the six months ended June 30, 2021 amounted to $1,277,000 compared to $1,077,000 for the six months

ended June 30, 2020.

The increase in comparison with the corresponding period was mainly due to an increase in payments to consultants,

share-based payments and hiring new sales consultants offset by decrease in travel and marketing expenses.

sales and marketing expenses for the three months ended June 30, 2021 amounted to $731,000 compared to $452,000 for the three months

ended June 30, 2020.

The increase in comparison with the corresponding period was mainly due to an increase in payments to consultants,

hiring new sales consultants and increase in share-based payments was offset by decrease in marketing expenses.

sales and marketing expenses for the nine months ended September 30, 2021 amounted to $1,798,000 compared to $1,632,000 for the nine

months ended September 30, 2020.

The increase in comparison with the corresponding period was mainly due to an increase in payments to

consultants, share-based payments and hiring new sales consultants offset by decrease in travel and marketing expenses.

sales and marketing expenses for the three months ended September 30, 2021 amounted to $521,000 compared to $555,000 for the three months

ended September 30, 2020.

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

offset by an increase in share-based payments.

and Administrative Expenses

general and administrative expenses for the six months ended June 30, 2021 amounted to $1,229,000 compared to $1,078,000 for the six

months ended June 30, 2020.

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

general and administrative expenses for the three months ended June 30, 2021 amounted to $605,000 compared to $562,000 for the three

months ended June 30, 2020.

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

a result of the foregoing, for the six month ended June 30, 2021, our operating loss was $5,829,000, an increase of $3,036,000, or

109%, compared to our operating loss for the six month ended June 30, 2020 of $2,793,000.

The increase from the corresponding period

primarily resulted from share based payment in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdon under that

certain Amendment to Purchase Agreement dated May 26, 2021.

a result of the foregoing, for the three month ended June 30, 2021, our operating loss was $4,313,000, an increase of $2,980,000, or

223%, compared to our operating loss for the three month ended June 30, 2020 of $1,333,000.

general and administrative expenses for the nine months ended September 30, 2021 amounted to $2,303,000 compared to $1,855,000

for the nine months ended September 30, 2020.

The increase in comparison with the corresponding period was mainly due to an increase

in professional services, insurance expenses and settlement expenses with the Lazar Parties (as defined below) offset by a decrease in

shared-based payments.

general and administrative expenses for the three months ended September 30, 2021 amounted to $799,000 compared to $1,074,000

for the three months ended September 30, 2020.

The increase in comparison with the corresponding period was mainly due to an increase

in professional expenses, mainly attributed to the proxy fight including settlement expenses with the Lazar Parties offset

by a decrease in shared-based payments.

a result of the foregoing, for the nine month ended September 30, 2021, our operating loss was $7,855,000, an increase of $3,420,000,

or 77%, compared to our operating loss for the nine month ended September 30, 2020 of $4,435,000.

The increase from the corresponding

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that certain Amendment to Purchase Agreement dated May 26, 2021.

financial income, net for the six months ended June 30, 2021 amounted to $32,000 as opposed to financial income of $30,000 for the six

months ended June 30, 2020.

During the six months ended June 30, 2021, financial income derived mainly from investment in marketable

and from exchange rate expenses.

financial expense, net for the three months ended June 30, 2021 amounted to $27,000 compared to financial income of $29,000 for the three

months ended June 30, 2020.

During the three months ended June 30, 2021, financial expenses mainly derived from revaluation of investment

in marketable securities whereas in the corresponding period we had financial income mainly from investment in marketable and from exchange

rate expenses.

a result of the foregoing, for the three month ended September 30, 2021, our operating loss was $2,026,000, compared to our operating

loss for the three month ended September 30, 2020 of $1,642,000.

financial income, net for the nine months ended September 30, 2021 amounted to $50,000 as opposed to financial expenses of $2,000

for the nine months ended September 30, 2020.

During the nine months ended September 30, 2021, financial income derived mainly from revaluation

of investment in marketable securities whereas in the corresponding period, we had financial expenses mainly derived from exchange rate

differences offset by financial income mainly from revaluation of investment in marketable securities.

financial income, net for the three months ended September 30, 2021 amounted to $18,000 compared to financial expense of $32,000 for

the three months ended September 30, 2020.

During the three months ended September 30, 2021, financial income mainly derived from

revaluation of investment in marketable securities whereas in the corresponding period we had financial expenses mainly from

revaluation of derivatives and from exchange rate expenses.

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 six months ended June 30, 2021 was $5,797,000 compared to net loss of $2,763,000 for the six months ended

June 30, 2020, the increase in the net loss was mainly due to the reasons mentioned above.

income, our net loss for the nine months ended September 30, 2021 was $7,805,000 compared to net loss of $4,437,000 for the nine

months ended September 30, 2020, the increase in the net loss was mainly due to the reasons mentioned above.

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 June 30, 2021 was $4,340,000, compared to net loss of $1,304,000 for the three months

ended June 30, 2020, the increase in the net loss was mainly due to the reasons mentioned above.

expenses, our net loss for the three months ended September 30, 2021 was $2,008,000, compared to net loss of $1,674,000 for the

three months ended September 30, 2020, the increase in the net loss was mainly due to the reasons mentioned above.

and Capital Resources

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and in the U.S.

of June 30, 2021, we had cash, cash equivalents, restricted cash of $5,093,000 compared to $1,774,000 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,

including the overallotment that closed in May 2021, and proceeds from warrants that were exercised, as further described below.

of September 30, 2021, we had cash, cash equivalents, restricted cash of $3,809,000 compared to $1,774,000 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, including the overallotment that closed in May 2021, and proceeds from warrants that were exercised, as further described

On October 28, 2021,

we sold in a registered direct offering 2,514,800 shares of our common stock and, in a concurrent private placement, an aggregate

of 1,886,100 unregistered warrants to purchase shares of common stock, at an offering price of $1.352 per share and associated warrant.

In addition, on the same day, we sold in a private placement of our securities 3,772,208 unregistered shares of common

stock and unregistered warrants to purchase up to an aggregate of 2,829,156 shares of common stock at the same purchase price as in the

registered direct offering.

The warrants are immediately exercisable and will expire five years from issuance at an exercise

price of $1.26 per share, subject to adjustment as set forth therein.

The gross proceeds from the offerings were $8,500,000.

The net proceeds to us from the offering were approximately $7,560,000 after deducting placement agent’s fees and

other estimated offering expenses payable by the Company.

October 26, 2021, holders of warrants exercised an aggregate of 2,625,908 shares of common stock in consideration for $2,889,000.

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

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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 $2,669,000 for the six months ended June 30, 2021, compared to $2,625,000 for the six months

ended June 30, 2020.

cash provided by investing activities was $172,000 for the six months ended June 30, 2021, compared to $200,000 (used in) investing activities

for the six months ended June 30, 2020.

cash provided by financing activities was $5,832,000 for the six months ended June 30, 2021, compared to $6,011,000 for the six months

ended June 30, 2020.

The cash flow from financing activities for the six months ended June 30, 2021 resulted from the public offerings

that occurred in January 2021 and March 2021, including the full exercise of the underwriter’s overallotment option that occurred

in May 2021 and from proceeds that were received from an investor for warrants that were exercised.

used in operating activities amounted to $3,984,000 for the nine months ended September 30, 2021, compared to $3,791,000 for the nine

months ended September 30, 2020.

cash provided by investing activities was $172,000 for the nine months ended September 30, 2021, compared to $209,000 (used in) investing

activities for the nine months ended September 30, 2020.

cash provided by financing activities was $5,857,000 for the nine months ended September 30, 2021, compared to $6,094,000 for the nine

months ended September 30, 2020.

The cash flow from financing activities for the nine months ended September 30, 2021 resulted from the

public offerings that occurred in January 2021 and March 2021, including the full exercise of the underwriter’s overallotment option

that occurred in May 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.

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additional funds in the future.

Based on the projected cash flows and cash balances as of June 30, 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.

Based on the projected cash flows, the proceeds from the October 2021 offerings and warrant exercises,

and cash balances as of September 30, 2021, management believes that the cash on hand will be sufficient to meet its obligations

for a period which is longer than 12 months.

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:

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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 2. Management’s Discussion and Analysis