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Item 5. Market for Registrant’s Common Equity

2022-03-18 compared with 2021-03-29 · 21 added, 324 removed, 0 unchanged (100% of the section changed)

MARKET FOR REGISTRANT’S

COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our stock currently

is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”.

Our stock has been

traded on the Nasdaq Capital Market since July 25, 2016.

As of March 26, 2021, we had 56 shareholders of record.

actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners

but whose shares are held in street name by brokers and other nominees.

Dividend Policy

We have never declared

or paid cash dividends on our common stock.

We intend to retain our future earnings, if any, in order to reinvest in the development

and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future.

future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition,

results of operations, capital requirements, and such other factors as our board of directors deems relevant.

Securities Authorized for Issuance

under Equity Compensation Plans

Information about

our equity compensation plans is incorporated herein by reference to “Item 12.

Security Ownership of Certain Beneficial

Owners and Management and Related Stockholder Matters”, of this Annual Report on Form 10-K.

Recent Sales of Unregistered Securities

SELECTED FINANCIAL DATA

As a “smaller

reporting company”

as defined by Item 10 of Regulation S-K, we are not required to provide this information.

MANAGEMENT’S DISCUSSION

AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONS

You should read

the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on

The following discussion contains forward-looking statements that are subject to risks, uncertainties and assumptions,

including those discussed under “Risk Factors.”

Our actual results, performance and achievements may differ materially

from those expressed in, or implied by, these forward-looking statements.

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

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

We believe that the commercial applications

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

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

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.

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.

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.

Results of Operations

The table below provides

our results of operations for the periods indicated.

Year ended December 31

(dollars in thousands)

Cost of revenues

Research and development expenses

Sales and marketing

General and administrative

Operating loss

Financial income (expenses), net

Year Ended December 31, 2020 Compared to Year Ended December

From inception through

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

further research and development activities.

We started to generate revenues only in 2019.

Our revenues for the year ended December

31, 2020 amounted to $142,000 compared to $63,000 for year ended December 31, 2019.

The increase from the 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.

and Development Expenses

Our research and development

expenses for the year ended December 31, 2020 amounted to $1,523,000 an increase of $7,000, or approximately 0.5%, compared to

$1,516,000 for the year ended December 31, 2019.

The increase resulted primarily from increased expenses associated with hiring

new employees and from stock-based payments, which were offset by a decrease in subcontractor expenses.

We expect that research

and development expenses will continue to increase in 2021 and that we will recruit additional employees.

Marketing Expenses

Our sales and marketing

expenses for the year ended December 31, 2020 amounted to $2,196,000, an increase of $267,000, or 13.8%, compared to $1,929,000

for the year ended December 31, 2019.

The increase primarily resulted from an increase in subcontractor and marketing expenses

which were offset by a decrease in travel expenses and from stock-based payments.

and Administrative Expenses

Our general and administrative

expenses for the year ended December 31, 2020 amounted to $2,567,000, a decrease of $20,000, or 0.8%, compared to $2,587,000 for

the year ended December 31, 2019.

The decrease compared to the corresponding period was mainly due to a reduction in stock-based

payment expenses, payroll expenses which were offset by an increase in rent and office maintenance related and insurance expenses.

During 2020, we had an expense of $276,000 in respect of stock-based payments, compared to an expense of $352,000 in 2019.

Operating Loss

As a result of the

foregoing, for the year ended December 31, 2020, our operating loss was $6,146,000, an increase of $156,000, or 2.6%, compared

to our operating loss for the year ended December 31, 2019 of $5,990,000.

Income (Expenses), net

financial expenses, net for the year ended December 31, 2020 amounted to $11,000 as opposed to financial income, net of $493,000

for the year ended December 31, 2019.

In 2020, we had financial expenses exchange rate differences offset by an income from fair

value revaluation of investment in marketable securities whereas in 2019 we had financial income from the fair value revaluation

of warrants offset by expenses from exchange rate differences and expenses from fair value revaluation of investment in marketable

As a result of the foregoing, research and development, marketing

general and administrative expenses, and initial revenues, our net loss for the year ended December 31, 2020 was $6,157,000 compared

to net loss of $5,497,000 for the year ended December 31, 2019.

The increase in net loss was mainly due increase in sales and marketing

expenses and financial expenses as opposed to financial income in the corresponding period.

Liquidity and Capital Resources

Since our inception,

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

As of December 31,

2020, we had cash, cash equivalents and restricted cash of $1,774,000 and short-term restricted deposit of $184,000 compared to

$1,466,000 cash, cash equivalents, restricted cash as of December 31, 2019 and short-term deposit and no short-term restricted

deposit as of December 31, 2019.

This increase primarily resulted from the public offerings that we completed in January and May

2020 both of which are further described below.

In addition, on 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 $1.28 per share for gross proceeds of $3,300,000.

We received net proceeds of approximately $2,904,000, after deducting the

underwriting discounts and commissions and estimated offering expenses.

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 $2,008,000.

We received 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 $0.8 million.

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.

We received net proceeds

of approximately $4.3 million, after deducting placement agent’s fees and other offering expenses payable by us.

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.

On January 15, 2020,

we completed a public offering of our securities pursuant to which we issued 514,801 shares of our 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 $2,000,000.

of the warrants are five and a half years.

We received net proceeds of $1,700,000 after deducting placement agent fees and other

offering expenses.

On September 13, 2019,

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

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 H.C.

Wainwright or the

ATM Prospectus Supplement.

From September 13, 2019 until December 31, 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.

We paid 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.

Net cash used in operating

activities was $5,679,000 for the year ended December 31, 2020 compared to $5,418,000 for the year ended December 31, 2019.

increase in cash used in operating activity is derived mainly from increase in the net loss.

Net cash used in investing

activities for the year ended December 31, 2020 was $211,000 as opposed to net cash provided by investing activities of $1,073,000

for the year ended December 31, 2019.

The net cash used in investing activities for the year ended December 31, 2020 was mainly

from investment in restricted deposits as opposed to proceeds from short-term deposits and restricted deposits during the year

ended December 31, 2019.

We had positive cash

flow from financing activities of $6,094,000 for the year ended December 31, 2020 compared to $266,000 for the year ended December

The cash flow from financing activities for the year ended December 31, 2020 was due to the proceeds from public offerings

of our securities and proceeds from the exercise of outstanding warrants.

We do not have any

material commitments for capital expenditures during the next twelve months.

Based on our projected cash flows and the cash balances

as of the date of this Annual Report on Form 10-K, we believe we have sufficient cash to fund our obligations through January 2022.

As a result, there is substantial doubt about our 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

comply with regulatory

requirements;

maintain compliance

with applicable laws.

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

only on unfavorable terms.

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

economic conditions, the impact of the COVID-19 pandemic 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 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 securities, which may have a further dilutive effect on the holders of any of our securities then-outstanding.

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.

Recently Issued Accounting Pronouncements

Certain recently issued

accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statements included

in “Item 8.

Financial Statements and Supplementary Data”

of this Annual Report on Form 10-K.

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.

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.

generally accepted accounting principles issued by the Financial Accounting Standards Board,

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 Annual Report

on Form 10-K, 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.

We 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;

changes in the estimate could have a material impact on our financial condition or results of operations.

Revenue from contracts with customers

The Company implemented ASC 606, Revenue

from Contract with Customers.

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 License 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.

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.

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

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

manner as the subscription services.

Product, Subscription and Services Offerings

Such performance obligations includes cloud-enabled subscriptions,

software maintenance and technical support.

Fully hosted subscription services (SaaS) allow customers to

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

Cloud-hosted subscription services

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

We recognize revenue ratably over the contractual service term for hosted services that are priced based

on a committed number of transactions where the delivery and consumption of the benefit of the services occur evenly over time,

beginning on the date the services associated with the committed transactions are first made available to the customer and continuing

through the end of the contractual service term.

Over-usage fees and fees based on the actual number of transactions are billed

in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variable

consideration.

Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions

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

DISCLOSURES ABOUT MARKET RISK.

As a “smaller

reporting company”

as defined by Item 10 of Regulation S-K, we are not required to provide this information.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”.

has been traded on the Nasdaq Capital Market since July 25, 2016.

of March 14, 2022, we had 58 shareholders of record.

The actual number of stockholders is greater than this number of record

holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.

have never declared or paid cash dividends on our common stock.

We intend to retain our future earnings, if any, in order to reinvest

in the development and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable

Any future determination to pay dividends will be at the discretion of our Board of Directors and will depend on our financial

condition, results of operations, capital requirements, and such other factors as our Board of Directors deems relevant.

Authorized for Issuance under Equity Compensation Plans

about our equity compensation plans is incorporated herein by reference to “Item 12.

Security Ownership of Certain Beneficial Owners

and Management and Related Stockholder Matters”, of this Annual Report on Form 10-K.

Sales of Unregistered Securities

November 24, 2021, our Board of Directors approved the adoption of a stockholder rights plan, or the Rights Plan, which was subsequently

approved by our shareholders at our annual shareholder meeting on December 30, 2021.

As of the date hereof, the Rights Plan has not

been entered into.

See our Definitive Proxy Statement filed with the SEC on December 6, 2021 for a further description of the Rights

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-K

Item 5. Market for Registrant’s Common Equity