What changed in this filing

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Item 1. Financial Statements

2022-08-15 compared with 2022-05-12 · 352 added, 288 removed, 221 unchanged (74% of the section changed)

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and Subsidiaries

of March 31, 2022

of June 30, 2022

Dollars in Thousands

AND ITS SUBSIDIARIES

Consolidated Interim Financial Statements as of March 31, 2022 (Unaudited)

Consolidated Interim Financial Statements as of June 30, 2022 (Unaudited)

Consolidated Interim Balance Sheets (Unaudited)

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

and cash equivalents

receivables and prepaid expenses

Current Assets:

and equipment, net

in marketable securities

non-current assets

and stockholders’ equity

lease liability

overdraft and borrowings

Cash and cash equivalents

Restricted cash

Inventory, net

Accounts receivable

Other receivables and prepaid expenses

Total current assets

Long term deposit

Property and equipment, net

Right-of-use asset

Intangible asset

Investment in marketable securities

Total non-current assets

Liabilities and stockholders’ equity

Current liabilities:

tax liabilities

lease liability

non-current liabilities

AND CONTINGENCIES

Stockholders’

Common stock of $ 0.001

par value - Authorized:

Account payables

Right of use liability

Bank overdraft and short-term loans

Trade payables

Other payables

Total current liabilities

Long term loans

Deferred tax liabilities

Long term right of use liability

Total non-current liabilities

Total liabilities

COMMITMENTS AND CONTINGENCIES

Stockholders’ equity:

Stock Capital -

Common stock of $ 0.001 par value - Authorized:

200,000,000 shares;

Issued and outstanding:

25,377,528 and 23,982,503 as of March 31, 2022 and December 31,

2021, respectively

paid-in capital

other comprehensive loss

stockholders’ equity

liabilities and stockholders’ equity

25,551,906 and 23,982,503 as of June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

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

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

and development

and marketing

and administrative

Six-Months Ended

Three-Months Ended

Cost of revenues

Operating expenses

income (expenses), net

comprehensive income (loss):

currency translation differences

comprehensive loss

and diluted loss per share

Basic and diluted

weighted average number of shares outstanding

Research and development

Sales and marketing

General and administrative

Total operating expenses

Operating loss

Financial income (expenses), net

Other comprehensive income (loss):

Foreign currency translation differences

Total comprehensive loss

Basic and diluted loss per share

Basic and diluted weighted average number of shares outstanding

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

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

other comprehensive

stockholders’

as of January 1, 2022

compensation related to options granted to employees and consultants

of shares in Business Combination ( * )

of shares in Business Combination

comprehensive loss

as of March 31, 2022

other comprehensive

stockholders’

as of January 1, 2021

compensation related to options granted to employees and consultants

Issuance of shares,

net of issuance cost of $ 736

Issuance of shares,

net of issuance cost

Additional paid-in

Accumulated other comprehensive

Total stockholders’

Balance as of January 1, 2022

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

Issuance of shares in Business Combination (*) (*)

Total comprehensive loss

Balance as of June 30, 2022

Additional paid-in

Accumulated other comprehensive

Total stockholders’

Balance as of January 1, 2021

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

Restricted shares issued to shareholder

Issuance of shares, net of issuance cost of $ 768

Exercise of warrants

comprehensive loss

as of March 31, 2021

Total comprehensive loss

Balance as of June 30, 2021

Additional paid-in

Accumulated other comprehensive

Total stockholders’

Balance as of April 1, 2022

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

Issuance of shares in Business Combination (*)

Total comprehensive loss

Balance as of June 30, 2022

Additional paid-in

Accumulated other comprehensive

Total stockholders’

Balance as of April 1, 2021

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

Restricted shares issued to shareholder

Issuance of shares, net of issuance cost of $ 32

Issuance of shares, net of issuance cost

Total comprehensive loss

Balance as of June 30, 2021

an amount less than $1

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

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dollars in thousands

flows from operating activities:

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

of operating lease right-of-use asset

of warrants and derivatives

of investment in marketable securities

based compensation

Decrease in accounts receivables

(Increase) in other receivables and prepaid expenses

Six-Months Ended

Cash flows from operating activities:

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

Depreciation and amortization

Amortization of right-of-use asset

Revaluation of derivatives

Revaluation of investment in marketable securities

Expenses arising from restricted shares issued to compensate waiver by a shareholder

Financing expenses

Stock based compensation

(Increase) in account receivables

Decrease (Increase) in other receivables and prepaid expenses

(Increase) in inventory

in trade payable

Intangible asset

Interest for the bank

Conditional commitment

Deferred tax liabilities

in accounts payable

cash used in operating activities

flows from investing activities:

Increase in other payables

(Decrease) in deferred tax liabilities

(Decrease) in trade payables

Increase in account payables

Net cash used in operating activities

Cash flows from investing activities:

Acquisition of a subsidiary, net of cash acquired

of property and equipment

cash provided by (used in) investing activities

flows from financing activities:

from issuance of shares, net of issuance costs

Loans received

Repayment of long term

from Exercise of warrants

cash provided by financing activities

of exchange rate fluctuations on cash and cash equivalents

(Decrease) in cash, cash equivalents and restricted cash

cash equivalents and restricted cash at the beginning of the period

cash equivalents and restricted cash at the end of the period

Change in restricted deposits

Purchase of property and equipment

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Proceeds from issuance of shares, net of issuance costs

Short term loans

Repayment of short-term loans

Repayment of long-term loans

Proceeds from Exercise of warrants

Net cash provided by (used in) financing activities

Effect of exchange rate fluctuations on cash and cash equivalents

Increase (decrease) in cash, cash equivalents and restricted cash ( * ) (*)

Cash, cash equivalents and restricted cash at the beginning of the period

Cash, cash equivalents and restricted cash at the end of the period

Non cash activities:

Shares issued in Acquisition of a subsidiary

$ 4,208 relates to change in cash and cash equivalents and $ 10 to change in restricted cash.

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

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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 market.

The technology is driven by

proprietary algorithms which are able to calculate and record measurements in a variety of

Following the acquisition of Orgad International

Marketing Ltd.

(“Orgad”) in February 2022 (see note 6), we also operate an omnichannel e-commerce platform.

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 acquisition of Orgad International Marketing Ltd.

(“Orgad”) in February 2022 (see note 6), the Company also operates an omnichannel

e-commerce platform.

Company has four subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all

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.

the three-month period ended March 31, 2022, the Company has incurred significant losses

and negative cash flows from operations and has an accumulated deficit of $ 47,379 .

has financed its operations mainly through fundraising from various investors.

References to the Company

include the subsidiaries unless the context indicates otherwise.

the six-month period ended June 30, 2022, the Company has incurred significant losses and negative cash flows from operations and

has an accumulated deficit of $ 49,095 .

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, 2022, management is of the opinion that

its existing cash will be sufficient to fund operations for a period less than 12 month.

Based on the projected cash flows and cash balances as of June 30, 2022, management is of the opinion that

its existing cash will be sufficient to fund operations for a period less than 12 months.

As a result, there is substantial doubt

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the Company fail to operate as a going concern.

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.

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.

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

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.

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 Israel, have from time to time implemented significant governmental measures 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.

While the COVID-19 pandemic did not materially adversely affect the Company’s

consolidated financial results and operations during the three and six months ended June 30, 2022, the COVID-19 pandemic affected

the Company’s operations in 2020 and 2021.

The pandemic may continue to have an impact on the Company’s business,

operations, and financial results and conditions, directly and indirectly, including, without limitation, impacts on the health of

the Company’s management and employees, its operations, marketing and sales activities, and on the overall economy.

to which COVID-19 impacts the Company’s operations will depend on future developments, which are highly uncertain

and cannot be predicted with confidence, including the duration and severity of the outbreak, and the actions that may be required

to contain COVID-19 or treat its impact.

2 - Significant Accounting Policies

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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.

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 three months ended March 31, 2022 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, 2021.

generally accepted accounting principles (“GAAP”) has been condensed

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

Operating results for the six months ended June 30, 2022 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, 2021.

AND ITS SUBSIDIARIES

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are measured at the lower of cost or net realizable value.

The cost of inventories comprises of the costs incurred in bringing the inventories to their present location and condition.

Net realizable value is the estimated

selling price in the ordinary course of business.

At the point of the loss recognition, a new, lower-cost basis for

that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that

newly established cost basis.

The cost of inventories comprises of the costs incurred in bringing the inventories

to their present location and condition.

Net realizable value is the estimated selling price in the ordinary course of business.

point of the loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances

do not result in the restoration or increase in that newly established cost basis.

Revenue Recognition

Since the acquisition of Orgad (see note

6 - Business combination), the Company’s revenues are comprised of two main categories:

(1) selling products

to customers (2) licensing cloud-enabled software subscriptions, associated software maintenance and support.

the acquisition of Orgad (see note 6 - Business combination), the Company’s revenues are comprised of two main categories:

selling products to customers (2) licensing cloud-enabled software subscriptions, associated software maintenance and support.

from sale of products

from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a

Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted

to governmental authorities.

Refunds are estimated at contract inception and updated at the end of each reporting period if additional

information becomes available.

Revenue is recognized when control of the product is transferred to the customer.

Company maintains a returns policy that allows its customers to return product within a specified period of time.

The estimate of the

provision for returns is based upon historical experience with actual returns.

from licensing

Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”).

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will be transferred to the customer.

Revenue from sale of products

Revenue from sale of

products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a

Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently

remitted to governmental authorities.

Refunds are estimated at contract inception and updated at the end of each reporting period if

additional information becomes available.

Revenue is recognized when control of the product is transferred to the customer.

The Company maintains

a returns policy that allows its customers to return product within a specified period of time.

The estimate of the provision for

returns is based upon historical experience with actual returns.

AND ITS SUBSIDIARIES

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and assumptions, which are uncertain, but believed to be reasonable.

estimates in valuing certain intangible assets include but are not limited to future expected cash flows from acquired platform s from

estimates in valuing certain intangible assets include but are not limited to future expected cash flows from acquired platforms from

a market participant perspective, useful lives and discount rates.

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believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

Acquisition-related costs

are recognized separately from the acquisition and are expensed as incurred.

Acquisition-related

costs are recognized separately from the acquisition and are expensed as incurred.

represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination.

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Goodwill is tested for impairment by comparing the

fair value of the reporting unit with its carrying value.

fair value of the reporting unit with it carrying value.

350 allows an entity to first assess qualitative factors to determine whether it is necessary

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Goodwill is not deductible for income tax purposes.

Goodwill is allocated to the fashion

and equipment e-commerce platform segment.

Goodwill is allocated to the fashion and

equipment e-commerce platform segment.

Alternatively ,

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are recorded at costs, net of accumulated amortization.

The Company amortizes its intangible assets reflecting the pattern in

which the economic benefits of the intangible assets are consumed.

The Company amortizes its intangible assets reflecting the pattern in which the

economic benefits of the intangible assets are consumed.

When a pattern cannot be reliably determined, the Company uses a straight-line

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estimated useful lives of the company’s intangible assets are as follows:

of Estimated Useful Lives of Intangible Assets

Schedule of Intangible Assets Estimated Useful Lives

period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstances

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3 - Financial Instruments

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

their fair value due to the short-term maturities of such instruments.

In addition, the carrying amounts of along term loan

is approximate to its fair value because there was no change in the market conditions since its exceptions.

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.

In addition, the carrying amounts of a long term

loan is approximate to its fair value because there was no change in the market conditions since its exceptions.

Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publicly traded

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Schedule of Significant Assets and Liabilities Measured at Fair Value on Recurring Basis

value hierarchy

in marketable securities (*)

value hierarchy

June 30, 2022

Fair value hierarchy

Financial assets

Investment in marketable securities (*)

June 30, 2022

Fair value hierarchy

Financial liabilities

AND ITS SUBSIDIARIES

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3 - Financial Instruments (Cont.)

value hierarchy

in marketable securities (*)

the three-month periods ended March 31, 2022 and 2021, the recognized gain (loss) (based on quoted market prices with a discount

due to security restrictions on iMine shares) of the marketable securities was ($ 14 ) and $ 49 , respectively.

value hierarchy

December 31, 2021

Fair value hierarchy

Financial assets

Investment in marketable securities (*)

the six and three-month periods ended June 30, 2022 and 2021, the recognized gain (loss) (based on quoted market prices with a discount

due to security restrictions on iMine shares) of the marketable securities was ($ 11 ) and $ 3 , and $ ( 22 ) and $ ( 27 ) respectively.

December 31, 2021

Fair value hierarchy

Financial liabilities

4 - Stock Based Compensation

stock-based expense equity awards recognized in the financial statements for services received is related to Cost of Revenues,

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

Schedule of Stock Options Granted to Non-Employees

stock-based expense equity awards recognized in the financial statements for services received is related to Cost of Revenues, Research

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

of Stock Based Compensation Expenses

Six months ended

Three months ended

Stock-based compensation expense – Cost of revenues

compensation expense - Research and Development

compensation expense - Sales and Marketing

compensation expense - General and Administrative

share based compensation expense

Stock-based compensation expense - Research and development

Stock-based compensation expense - Sales and marketing

Stock-based compensation expense - General and administrative

Stock-based compensation expense

issued to consultants:

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Unexercised options shall expire 5 years from the effective date.

the three-month period ended March 31,2022 and 2021, an amount of $ 3

respectively, were recorded by the Company as stock-based

equity awards with respect to Consultants.

the six and three-month period ended June 30,2022 and 2021, an amount of $ 7

and $ 7 and $ 4 respectively, were recorded by the Company as stock-based equity awards with respect to Consultants.

Option Plan for Employees:

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

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 three-month period ended March 31, 2022 were $ 2 and

$1, respectively and the expenses during the three months ended March 31, 2021 were $ 47 and $4, 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, 2022, the Company didn’t grant any stock options under the 2017

Employee Plan, no options were exercised and options to purchase 51,873

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

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 six-month period ended June 30, 2022 and 2021 were $ 2

respectively and the expenses during the three months ended June 30, 2022 and 2021 were $ 47

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

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

On December 30, 2021, the Company’s shareholders approved an increase in the shares available for issuance under

the 2017 Equity Incentive Plan from 1,450,000 shares to 5,770,000 shares.

the six and three-month period ended June 30, 2022, the Company did not grant any stock options under the 2017 Employee Plan, no

options were exercised and options to purchase 51,873

shares of common stock, expired.

total stock option compensation expense during the three-month period ended March 31, 2022 and 2021 which was recorded

total stock option compensation expense during the six and three-month period ended June 30, 2022 and 2021 which was recorded was $ 44

respectively.

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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

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.

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.

On December 30, 2021, the Court denied both My Size and North Empire’s motions for

summary judgment, arguing there were factual issues to be determined at trial.

26, 2022, the Company filed a notice of appeal of the summary judgment decision.

must be fully perfected and filed by July 26, 2022.

On February 3, 2022, the Company filed

a motion to reargue the Court’s decision denying the Company’s motion for summary

On or about March 31, 2022, North Empire filed its opposition papers to the

Company’s motion to reargue.

The return date on the motion to reargue has been adjourned

to May 23, 2022.

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 thousands .

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.

On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing

there were factual issues to be determined at trial.

On January 26, 2022, the Company filed a notice of appeal of the summary

judgment decision.

The appeal must be fully perfected and filed by September 24, 2022.

On February 3, 2022, the Company filed a

motion to reargue the Court’s decision denying the Company’s motion for summary judgment.

On or about March 31, 2022,

North Empire filed its opposition papers to the Company’s motion to reargue.

On or about May 20, 2022 the Company filed its

reply papers, in further support of its motion to reargue.

That motion is now fully briefed and the Company is waiting on a decision from

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

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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.

Court in Tel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $ 450 ) 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 ).

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 ).

Company filed its statement of defense on October 25, 2021.

the investment agreement void with full restitution of plaintiffs’ original investment in an amount of NIS 1,329,650 (approximately

The Company filed its statement of defense on October 25, 2021.

The first court preliminary hearing was held on March

the first preliminary hearing and the Court’s comments and recommendation, the plaintiffs filed a motion to strike out the

claim without prejudice.

Following the first preliminary hearing and the Court’s comments and recommendation, the plaintiffs filed a motion

to strike out the claim without prejudice.

On March 8, 2022 the Court ordered dismissal without prejudice of the claim.

The Court also ruled that to

the extent the plaintiffs will not move within 7 days to revise their motion do dismiss their claim “with prejudice”, the

Company will be entitled to request an order for costs.

On April 11, 2022 the Court ordered the plaintiffs to pay the Company’s

costs in the amount of NIS 15,000 ,

within 30 days.

also ruled that to the extent the plaintiffs will not move within 7 days to revise their motion do dismiss their claim “with

prejudice”, the Company will be entitled to request an order for costs.

On April 11, 2022 the Court ordered the plaintiffs

to pay the Company’s costs in the amount of NIS 15,000 , within 30 days.

AND ITS SUBSIDIARIES

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6 – Business Combination

February 7, 2022, the Company acquired 100 %

of the shares and voting interests in Orgad an omnichannel

e-commerce platform .

The acquisition was designed to create an additional revenue stream for the Company by becoming a direct

e-commerce seller while leveraging the synergies between MySizeID and Orgad’s e-commerce platform.

February 7, 2022, the Company acquired 100 % of the shares

and voting interests in Orgad an omnichannel e-commerce platform .

The acquisition was designed

to create an additional revenue stream for the Company by becoming a direct e-commerce seller while leveraging the synergies between

MySizeID and Orgad’s e-commerce platform.

results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7,

Orgad revenues included in the Company’s consolidated statement of operations from February 7, 2022 through March 31, 2022

Orgad revenues included in the Company’s consolidated statement of operations from February 7, 2022 through June 30, 2022

and for the three-month period ended June 30,

2022 were $ 752 .

If the acquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the

year would have been $ 2,768

thousand, and the net loss would have been $ 2,272 thousand

If the acquisition had occurred on January 1, 2021,

management estimates that the consolidated pro forma revenues for the year would have been $ 2,768 ,

and the net loss would have been $ 2,272 .

Consideration

following table summarizes the acquisition date fair value of each major class of consideration:

of Fair Value of Acquisition

of shares of common stock ( 1,395,025

consideration transferred

of Fair value of the Acquisition

Issuance of shares of common stock ( 1,395,025

shares) ( ** ) (**)

Total consideration transferred

cash payment is subject to working capital adjustments.

(**) Quoted price as of acquisition date

addition, the Company agreed to pay to the former owners of Orgad, on the two-year and the three-year anniversary of the

closing, $ 350,000

in each of these years provided that in the

case of the second and third installments certain revenue targets are met and subject further to certain downward post-closing adjustment.

price as of acquisition date

addition, the Company agreed to pay to the former owners of Orgad, on the two-year and the three-year anniversary of the closing,

in each of these years provided that in the case of the second and third instalments certain revenue targets are met and subject

further to certain downward post-closing adjustment.

Furthermore, 1,395,024

shares of common stock will be issued

in eight equal quarterly instalments until the lapse of two years from closing.

Additional earn-out payments of 10 %

shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years from closing.

earn-out payments of 10 %

of the operating profit of Orgad for the years 2022 and 2023 will also be paid.

2 unchanged sentences

for the business combination.

During the three-month period

ended March 31,2022 an amount of $ 83 and $ 72 was recorded by the Company as expenses, with respect to the future grants and payments.

During the six and three-month period

ended June 30, 2022 an amount of $ 111

was recorded in respect of the cash instalments respectively, and $ 127

in respect of stocks issuance, respectively.

assets acquired and liabilities assumed

the preliminary purchase price allocation, the Company allocates the purchase price to tangible and identified intangible assets acquired

the preliminary purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired

and liabilities assumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation

10 unchanged sentences

6 – Business Combination (Cont.)

The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:

following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:

of Fair Value of Assets Acquired and Liabilities

and Cash Equivalent

identifiable net assets acquired

estimated useful lives of the selling platform are 3 years .

During the three-month period ended March 31,2022 an amount of $ 21 was recorded

by the Company as an expense.

Cash and Cash Equivalent

Trade receivables

Other receivables

Long-term deposits

Selling platform (*)

Short-term credit

Trade payables

Other payables

Long-term loan

Deferred Taxes

Total net assets acquired

estimated useful lives of the selling platform are three

During the six and three-month period ended June 30,2022 an amount of $ 52

was recorded in respect of amortization expenses.

Acquisition-related

The Company incurred transaction

costs of approximately $ 55

thousand during the 3-month period

ended March 31, 2022 which were included in general and administrative expenses

in the consolidated statements of income (loss).

Company incurred transaction costs of approximately $ 55

and none during the six-month and three-month period ended June 31, 2022 which were included

in general and administrative expenses in the consolidated statements of income (loss), (the total amount recorded during the first

quarter of the year).

AND ITS SUBSIDIARIES

2 unchanged sentences

7 – Operating Segments

The Company’s reportable

operating segments are (i) fashion and equipment e-commerce platform see note 6, regarding business combination and (ii)

SaaS based innovative artificial intelligence driven measurement solutions.

The fashion and equipment e-commerce platform which represent

Orgad’s activity that was acquired by the Company, mainly operates on Amazon.

The SaaS based innovative artificial

intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel.

As a result of the business

combination in the reporting period (see note 6), the company has two reportable segments:

(i) fashion and equipment e-commerce

platform and (ii) SaaS based innovative artificial intelligence driven measurement

The fashion and equipment e-commerce platform which represent Orgad’s activity that was acquired by the Company,

mainly operates on Amazon.

The SaaS based innovative artificial intelligence driven measurement solutions, or SaaS Solutions

operating segment consists of My Size Inc and My Size Israel.

related to the operations of the Company’s reportable operating segments is set forth below:

of Reportable Operating Segments

and equipment e-commerce platform

the three months ended March 31, 2022

loss (income)

and equipment e-commerce platform

March 31, 2022:

Fashion and equipment e-commerce platform

For the six months ended June 30, 2022

Operating (loss) income

For the three months ended June 30, 2022

Operating (loss) income

Fashion and equipment e-commerce platform

For June 30, 2022:

8 – Subsequent events

July 2022, Amazon deactivated Orgad’s Amazon U.S.

store as a result of complaints submitted due to an error in the listed

manufacturer of certain products on Orgad’s store.

Orgad resolved the complaints and is presently in the process of having its

account reinstated.

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