My Size, Inc. 10-Q

Item 1. Financial Statements. My Size Inc. and Subsidiaries Condensed Consolidated Interim Financial Statements As of September 30, 2021 (unaudited) U.S. Dollars in Thousands 1 MY SIZE, INC. AND ITS SUBSIDIARIES Condensed Consolidated Interim Financial Statements as of September 30, 2021 (Unaudited) Contents Page Condensed Consolidated Interim Balance Sheets (Unaudited) 3 Condensed Consolidated Interim Statements of Comprehensive Loss (Unaudited) 4 Condensed Consolidated Interim Statements of Changes in Stockholders’ Equity (Unaudited) 5 Condensed Consolidated Interim Statements of Cash flows (Unaudited) 6 Notes to Condensed Consolidated Interim Financial Statements (Unaudited) 7-11 2 MY SIZE, INC. AND ITS SUBSIDIARIES Condensed Consolidated Interim Balance Sheets (Unaudited) U.S. dollars in thousands (except share data and per share data) September 30, December 31, 2021 2020 Assets Current Assets: Cash and cash equivalents 3,539 1,689 Restricted cash 270 85 Restricted deposit - 184 Accounts receivable 37 28 Other receivables and prepaid expenses 121 482 Total current assets 3,967 2,468 Property and equipment, net 108 128 Right-of-use asset 792 911 Investment in marketable securities 105 59 Total non-current assets 1,005 1,098 Total assets 4,972 3,566 Liabilities and stockholders’ equity Current liabilities: Operating lease liability 130 129 Trade payables 556 381 Accounts payable 705 400 Derivatives (*) - 1 Total current liabilities 1,391 911 Operating lease liability 493 579 Total non-current liabilities 493 579 Total liabilities 1,884 1,490 COMMITMENTS AND CONTINGENCIES - Stockholders’ equity: Stock Capital - Common stock of $ 0.001 par value - Authorized: 100,000,000 shares; Issued and outstanding: 15,069,587 and 7,232,836 as of September 30, 2021 and December 31, 2020, respectively 15 7 Additional paid-in capital 45,981 37,164 Accumulated other comprehensive loss ( 432 ) ( 424 ) Accumulated deficit ( 42,476 ) ( 34,671 ) Total stockholders’ equity 3,088 2,076 Total liabilities and stockholders’ equity 4,972 3,566 (*) Represents an amount less than $1 The accompanying notes are an integral part of the condensed consolidated interim financial statements. 3 MY SIZE, INC. AND ITS SUBSIDIARIES Condensed Consolidated Interim Statements of Comprehensive Loss (Unaudited) U.S. dollars in thousands (except share data and per share data) Nine-Months Ended September 30, Three-Months Ended September 30, 2021 2020 2021 2020 Revenues 88 139 31 88 Cost of revenues - ( 2 ) - ( 1 ) Gross profit 88 137 31 87 Operating expenses Research and development ( 3,842 ) ( 1,085 ) ( 462 ) ( 397 ) Sales and marketing ( 1,798 ) ( 1,632 ) ( 521 ) ( 555 ) General and administrative ( 2,303 ) ( 1,855 ) ( 1,074 ) ( 777 ) Total operating expenses ( 7,943 ) ( 4,572 ) ( 2,507 ) ( 1,729 ) Operating loss ( 7,855 ) ( 4,435 ) ( 2,026 ) ( 1,642 ) Financial income (expenses), net 50 ( 2 ) 18 ( 32 ) Net loss ( 7,805 ) ( 4,437 ) ( 2,008 ) ( 1,674 ) Other comprehensive income (loss): Foreign currency translation differences ( 8 ) 53 8 50 Total comprehensive loss ( 7,813 ) ( 4,384 ) ( 2,000 ) ( 1,624 ) Basic and diluted loss per share ( 0.62 ) ( 0.89 ) ( 0.13 ) ( 0.23 ) Basic and diluted weighted average number of shares outstanding 12,546,022 4,971,202 15,044,184 7,217,619 The accompanying notes are an integral part of the interim condensed consolidated financial statements 4 MY SIZE, INC. AND ITS SUBSIDIARIES Condensed Consolidated Interim Statements of Changes in Stockholders’ Equity (Unaudited) U.S. dollars in thousands (except share data and per share data) Common stock Additional paid-in Accumulated other comprehensive Accumulated Total stockholders’ Number Amount capital loss deficit equity Balance as of January 1, 2021 7,232,836 7 37,164 ( 424 ) ( 34,671 ) 2,076 Stock-based compensation related to options granted to employees and consultants - - 350 - - 350 Exercise of options granted to employees 4,458 ** ** - - ** Restricted shares issued to shareholder (*) 2,500,000 3 2,615 - - 2,618 Issuance of shares, net of issuance cost of $ 768 4,580,491 4 5,031 - - 5,035 Exercise of warrants and pre funded warrants Exercise of warrants and pre funded warrants, shares Liability reclassified to equity Exercise of warrants 751,802 1 821 - - 822 Total comprehensive loss - - - ( 8 ) ( 7,805 ) ( 7,813 ) Balance as of September 30, 2021 15,069,587 15 45,981 ( 432 ) ( 42,476 ) 3,088 (*) See note 1 c. (**) Represents an amount less than $1 Common stock Additional paid-in Accumulated other comprehensive Accumulated Total stockholders’ Number Amount capital loss deficit equity Balance as of January 1, 2020 2,085,900 2 30,102 ( 539 ) ( 28,514 ) 1,051 Stock-based compensation related to options granted to employees and consultants - - 388 - - 388 Issuance of shares, net of issuance cost of $ 1,000 2,439,802 3 5,992 - - 5,995 Exercise of warrants and pre funded warrants 2,707,134 2 97 99 Liability reclassified to equity - - 328 - - 328 Total comprehensive loss - - - 53 ( 4,437 ) ( 4,384 ) Balance as of September 30, 2020 7,232,836 7 36,907 ( 486 ) ( 32,951 ) 3,477 Common stock Additional paid-in Accumulated other comprehensive Accumulated Total stockholders’ Number Amount capital loss deficit equity Balance as of July 1, 2021 15,038,327 15 45,838 ( 440 ) ( 40,468 ) 4,945 Stock-based compensation related to options granted to employees and consultants - - 118 - - 118 Exercise of options granted to employees 4,458 - ** - ** - - - ** Exercise of warrants 26,802 - ** 25 - - 25 Total comprehensive loss - - - 8 ( 2,008 ) ( 2,000 ) Balance as of September 30, 2021 15,069,587 15 45,981 ( 432 ) ( 42,476 ) 3,088 (**) Represents an amount less than $1 Common stock Additional paid-in Accumulated other comprehensive Accumulated Total stockholders’ Number Amount capital loss deficit equity Balance as of July 1, 2020 7,157,836 7 36,599 ( 536 ) ( 31,277 ) 4,793 Stock-based compensation related to options granted to employees and consultants - - 225 - - 225 Exercise of warrants 75,000 - ** 83 - - 83 Total comprehensive loss - - - 50 ( 1,674 ) ( 1,624 ) Balance as of September 30, 2020 7,232,836 7 36,907 ( 486 ) ( 32,951 ) 3,477 (**) Represents an amount less than $1 5 MY SIZE, INC. AND ITS SUBSIDIARIES Condensed Consolidated Interim Statements of Cash Flows (Unaudited) U.S. dollars in thousands Nine-Months Ended September 30, 2021 2020 Cash flows from operating activities: Net loss ( 7,805 ) ( 4,437 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 31 28 Amortization of operating lease right-of-use asset 32 31 Revaluation of warrants and derivatives ( 1 ) 2 Revaluation of investment in marketable securities ( 46 ) ( 18 ) Expense arising from restricted shares issued to compensate waiver by a shareholder 2,618 - Stock based compensation 350 388 (Increase) decrease in accounts receivables ( 9 ) 5 Decrease in other receivables and prepaid expenses 359 218 Increase (decrease) in trade payable 176 ( 10 ) Increase in accounts payable 311 2 Net cash used in operating activities ( 3,984 ) ( 3,791 ) Cash flows from investing activities: Change in restricted deposits 184 ( 170 ) Investment in right-of-use asset - ( 25 ) Purchase of property and equipment ( 12 ) ( 14 ) Net cash provided by (used in) investing activities 172 ( 209 ) Cash flows from financing activities: Proceeds from issuance of shares, net of issuance costs 5,035 6,094 Proceeds from Exercise of warrants 822 - Net cash provided by financing activities 5,857 6,094 Effect of exchange rate fluctuations on cash and cash equivalents ( 10 ) 44 Increase in cash, cash equivalents and restricted cash 2,035 2,138 Cash, cash equivalents and restricted cash at the beginning of the period 1,774 1,466 Cash, cash equivalents and restricted cash at the end of the period 3,809 3,604 Non cash activities: Restricted shares issued to shareholder 2,618 - The accompanying notes are an integral part of the interim condensed consolidated financial statements. 6 MY SIZE, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Interim Financial Statements (Unaudited) U.S. dollars in thousands (except share data and per share data) Note 1 - General a. My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel e-commerce market, to the courier services market and to the Do It Yourself smartphone and tablet apps market. The technology is driven by proprietary algorithms which are able to calculate and record measurements in a variety of novel ways. The Company has three subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”) and Topspin Medical (Israel) Ltd., both of which are incorporated in Israel and My Size LLC which was incorporated in the Russian Federation. References to the Company include the subsidiaries unless the context indicates otherwise. b. During the nine month period ended September 30, 2021, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $ 42,476 . The Company has financed its operations mainly through fundraising from various investors. Taking into account the proceeds from warrant exercises and the Company’s financing in October 2021 described in note 7b below, management’s believes that cash on hand will be sufficient to meet its obligations for a period which is longer than 12 months. c. Further to note 1b of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020: On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”) which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantially dependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights (the “Waiver”). In consideration of the Waiver, the Company issued 2,500,000 shares of common stock to Ms. Zigdon in a private placement. The Company measured the fair value of the shares based on the quoted market price of common stock adjusted to reflect the effect of the sales restrictions. During the nine and three month period ended September 30, 2021, an amount of $ 2,618 and $ 0 was recorded in research and development expense respectively. Note 2 - Significant Accounting Policies a. Unaudited condensed consolidated financial statements : The 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, 2021 are not necessarily indicative of the results that may be expected for any future period or for the year ending December 31, 2021. These 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. b. Use of estimates : The 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. 7 MY SIZE, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Interim Financial Statements (Unaudited) U.S. dollars in thousands (except share data and per share data) Note 3 - Financial Instruments Fair value of financial instruments: Accounting 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. In 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: a. The condition and location of the asset. b. Restrictions, if any, on the sale or the use of the asset. As 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: Level 1 - 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. Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. 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 carrying amounts of cash and cash equivalents, accounts receivable, other receivables, trade payables and accounts payable approximate their fair value due to the short-term maturities of such instruments. The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publicly-traded company on the OTCQB. Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for an otherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the sales restrictions and is therefore, ranked as Level 2 assets. Schedule of Fair value of Financial Assets and Liabilities September 30, 2021 Fair value hierarchy Level 1 Level 2 Level 3 Financial assets Investment in marketable securities (*) - 105 - 8 MY SIZE, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Interim Financial Statements (Unaudited) U.S. dollars in thousands (except share data and per share data) Note 3 - Financial Instruments (Cont.) December 31, 2020 Fair value hierarchy Level 1 Level 2 Level 3 Financial assets Investment in marketable securities (*) - 59 - (*) For the nine and three month periods ended September 30, 2021 and 2020, the recognized gain (loss) (based on quoted market prices with a discount due to security restrictions on iMine shares) of the marketable securities was $ 46 and $ 24 , and $ 18 and $ 3 , respectively. December 31, 2020 Fair value hierarchy Level 1 Level 2 Level 3 Financial liabilities Derivatives - 1 - Note 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: Schedule of Stock Based Expenses Nine months ended September 30, Three months ended September 30, 2021 2020 2021 2020 Stock-based compensation expense - Research and development 103 126 33 75 Stock-based compensation expense - Sales and marketing 164 87 71 41 Stock-based compensation expense - General and administrative 83 175 14 109 350 388 118 225 Warrants issued to consultants: a. In May 2021, 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 (i) a warrant to purchase up to 50,000 shares of the Company’s common stock exercisable at $ 1.50 per share and expiring on December 31, 2022 , and (ii) a warrant to purchase up to 50,000 shares of the Company’s common stock exercisable at $ 2.00 per share and expiring on December 31, 2022 . During the nine and three month period ended September 30, 2021, an amount of $ 63 , and $ 25 , respectively, was recorded by the Company as stock option compensation expense with respect to the consultant. b. In June 2021, the Company entered into a consulting agreement with a consultant pursuant to which the Company agreed to issue to the consultant a warrant to purchase up to 50,000 shares of the Company’s common stock exercisable at $ 1.50 per share and expiring on December 31, 2022 . During the nine and three month period ended September 30, 2021, an amount of $ 34 and $ 25 was recorded by the Company as stock option compensation expense with respect to the consultant. c. During the nine month period ended September 30, 2021, the Company issued 150,000 warrants to consultants, no such warrants were exercised and warrants to purchase 3,667 shares expired. The total stock option compensation expense during the nine and three month period ended September 30, 2021 and 2020 which was recorded under sales and marketing was $ 116 , $ 56 , $ 8 and $ 3 respectively and under general and administrative was $ 0 , $ 0 , $ 17 and $ 5 , respectively. 9 MY SIZE, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Interim Financial Statements (Unaudited) U.S. dollars in thousands (except share data and per share data) Note 4 - Stock Based Compensation (Cont.) Stock 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 the nine and three month period ended September 30, 2021 were $ 2 and $ 1 , respectively 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 number of shares available for issuance under the Company’s 2017 Consultant Incentive Plan was reduced from 466,667 to 216,667 shares. During the nine and three month period ended September 30, 2021, the Company granted an aggregate of 97,500 of stock options under the 2017 Employee Plan, 4,458 options were exercised and options to purchase 40,777 and 19,167 shares of common stock, respectively, expired. The total stock option compensation expense during the nine and three month period ended September 30, 2021 and 2020 which was recorded was $ 234 and $ 62 , and $ 312 and $ 209 , respectively. 10 MY SIZE, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Interim Financial Statements (Unaudited) U.S. dollars in thousands (except share data and per share data) Note 5 - Contingencies and Commitments a. 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 . 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. The Company believes it is more likely than not that the counterclaims will be denied. b. On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court in Tel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $ 450,000 ) and a declaratory relief. The plaintiffs allege that the Company breached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consulting agreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $ 256,000 ). Additionally, the plaintiffs allege that the Company should compensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering. In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investment in an amount of NIS 1,329,650 (approximately $ 415,000 ). The Company filed its statement of defense on October 25, 2021. The first preliminary court hearing of the case is scheduled for January 23, 2022. At this preliminary stage, before any fact finding and pre-trial procedures (including disclosure of documents) have been conducted the Company cannot evaluate the chances of the claim to succeed. c. In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand for election to our board of directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling for changes to our management. On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 of the General Corporation Law of the State of Delaware compelling us to hold an annual meeting. On November 4, 2021, the Company entered into a settlement agreement (the “Settlement Agreement”) with Custodian and certain affiliates and director nominees (collectively, the “Lazar Parties”) settling and dismissing the Delaware Action (see note 7c). On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York against Custodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., David Aboudi, Patrick Loney and David Nathan, , pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rules promulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’ efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directors to the Company’s board of directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another (see note 7c). On November 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against the Company pursuant to New York Civil Rights Law Section 70-a, also known as New York’s anti-SLAPP statute. Note 6 - Significant Events During the Reporting Period a. On 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. b. In January and February 2021, a holder of warrants exercised warrants to purchase 725,000 ordinary shares of the Company in exchange for $ 797 . c. On 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. d. On May 7, 2021, the Company issued 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 $ 463 . e. On May 26, 2021, the Company issued 2,500,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(c) above. f. 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, spread globally. Many 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. Note 7 - Events Subsequent to the balance sheet date a. On October 26, 2021, holders of warrants exercised an aggregate of 2,625,908 shares of common stock in consideration for $ 2,889 . b. On October 28, 2021, the Company sold in a registered direct offering 2,514,800 shares of its 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, the Company sold in a private placement 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 . The net proceeds to the Company from the offerings were approximately $ 7,560 , after deducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Company issued to the placement agent warrants to purchase 440,091 shares on substantially the same terms as the purchasers in the offerings at an exercise price of $ 1.69 per share and a term expiring on October 26, 2026 . c. On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, the Company and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the Settlement Agreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company an aggregate amount equal to $ 275 , to be paid within three business days of the effective date of the Settlement Agreement. With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12, 2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) the notice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring its nomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials and notices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitation of any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by the Company or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains non-disparagement and confidentiality provisions, subject to certain exceptions. 11