What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-08-15 · 162 added, 92 removed, 190 unchanged (57% of the section changed)

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

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

results of operations and financial condition for the periods described.

This discussion should be read together with our condensed

consolidated interim financial statements and the notes to the financial statements, which are included in this Quarterly Report on

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

the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 31, 2022, or the Annual Report,

including the consolidated annual financial statements as of December 31, 2021, and their accompanying notes included

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

of operations and financial condition for the periods described.

This discussion should be read together with our condensed consolidated

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

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

31, 2021, filed with the Securities and Exchange Commission on March 31, 2022, or the Annual Report, including the consolidated annual

financial statements as of December 31, 2021, and their accompanying notes included therein.

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

46 unchanged sentences

a Delaware corporation, and its subsidiaries, including MySize Israel

Ltd, Topspin Medical (Israel) Ltd, Orgad International Marketing Ltd., or Orgad and My Size LLC.

taken as a whole.

2014 Ltd, Topspin Medical (Israel) Ltd, Orgad International Marketing Ltd., or Orgad, My Size LLC and Naiz Bespoke Technologies,

S.L taken as a whole.

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

43 unchanged sentences

(i) 1,395,025 shares were issued at

closing, and (ii) 1,395,024 shares will be issued in eight equal quarterly installments until the lapse of two years from closing,

subject to certain downward post-closing adjustment.

closing, and (ii) 1,395,024 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject

to certain downward post-closing adjustment.

payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad

2 unchanged sentences

connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and six-month lock-up agreements

Bespoke Technologies Acquisition

October 7, 2022, My Size, Inc., or My Size, entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui,

or Borja, Aritz Torre Garcia, or Aritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI.

Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred to as the Naiz Sellers herein.

Pursuant to the Naiz Agreement, the

Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limited liability company incorporated under

the laws of Spain.

The acquisition of Naiz was completed on October 11, 2022.

consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an

aggregate of 6,000,000 shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate,

immediately prior to the issuance of such shares at the closing of the transaction, not more than 19.9% of the issued and outstanding

Shares and (ii) up to US$2,050,000 in cash, the Naiz Cash Consideration.

Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock

were issued to Whitehole constituting 6.6% of our outstanding shares following such issuance.

The Naiz Agreement also provides that,

in the event that the actual value of the Naiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital

Market over the 10 trading days prior to the closing of the transaction, or the Equity Value Averaging Period) is less than US$1,650,000,

My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellers within 45 days of our receipt of Naiz’s

2025 audited financial statements;

provided that certain revenue targets are met.

Following the Equity Value Averaging Period, it was

determined that the Shortfall Value is US$459,240.

Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule:

(i) US$500,000

at closing, (ii) up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii)

up to US$350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financial statements for the six months ended June

30, 2023, (iv) up to US$350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financial statements for the six

months ended December 31, 2023, and (v) up to US$350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial

provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.

payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja

and Aritz, or the Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to

a Good Reason (as defined in the Naiz Agreement).

Naiz Agreement contains customary representations, warranties and indemnification provisions.

In addition, the Naiz Sellers will be subject

to non-competition and non-solicitation provisions pursuant to which they agree not to engage in competitive activities with respect

to My Size’s business.

connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into six-month lock-up agreements, or the Lock-Up Agreement,

with My Size, (ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of

the Key Persons entered into employment agreements and services agreements with Naiz.

Lock-Up Agreement provides that each Naiz Seller will not, for the six-month period following the closing of the transaction, (i) offer,

pledge, sell, contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant

any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible

into or exercisable or exchangeable for Shares in each case, that are currently or hereafter owned of record or beneficially (including

holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any such offer, sale, pledge, grant, transfer

or disposition;

or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of the economic

consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this

clause (ii) is to be settled by delivery of Shares or such other securities, in cash or otherwise.

The Lock-Up Agreement also contains

an additional three-month “dribble-out” provision that provides following the expiration of the initial six-month lock-up

period, without My Size’s prior written consent (which My Size shall be permitted to withhold at its sole discretion), each Naiz

Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average daily

trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.

Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders,

will be exercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each

Naiz Acquisition Stockholder will irrevocably designate and appoint the then-current Proxy as its sole and exclusive attorney-in-fact

and proxy to vote and exercise all voting right with respect to the Shares held by each Naiz Acquisition Stockholder.

The Voting Agreement

also provides that, if the voting power held by the Proxy, taking into account the proxies granted by the Naiz Acquisition Stockholders

and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that will vote on an item,

or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as

the Shares that are voted by My Size’s other stockholders.

The Voting Agreement will terminate on the earliest to occur of (i)

such time that such Naiz Acquisition Stockholder no longer owns the Shares, (ii) the sale of all or substantially all of the assets of

My Size or the consolidation or merger of My Size with or into any other business entity pursuant to which stockholders of My Size prior

to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity, (iii) the liquidation,

dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency

or reorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or

protection of debtors.

addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC.

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Three months ended

Six months ended

Nine months ended

(dollars in thousands)

6 unchanged sentences

Financial income (expenses), net

and Three Months Ended June 30, 2022 Compared to Six and Three Months Ended June 31, 2021

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

perform further research and development activities.

Our revenues for the six months ended June 30, 2022 amounted to $1,205,000

compared to $57,000 for the six months ended June 30, 2021.

Our revenues for the three months ended June 30, 2022 amounted to

$801,000 compared to $30,000 for the three months ended June 30, 2021.

The increase was primarily attributable to $1,112,000 in

revenue generated from Orgad from February 7, 2022, the the date of closing of the Orgad acquisition, or the Acquisition Date,

through to the end of the second quarter 2022 and to $752,000 in revenue generated from Orgad for the three months ended June 30,

cost of revenues expenses for the six and three months ended June 30, 2022 amounted to $730,000 and $479,000, respectively, compared

to none for the six and three months ended June 30, 2021.

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

cost of goods of the revenues generated from Orgad’s operations.

and Three Months Ended September 30, 2022 Compared to Nine and Three Months Ended September 30, 2021

We started to generate revenue in 2019 and we expect to incur additional

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

Our revenues for the nine

months ended September 30, 2022 amounted to $1,931,000 compared to $88,000 for the nine months ended September 30, 2021.

for the three months ended September 30, 2022 amounted to $726,000 compared to $31,000 for the three months ended September 30, 2021.

The increase was primarily attributable to $1,797,000 in revenue generated from Orgad from February 7, 2022, the date of closing of the

Orgad acquisition, or the Acquisition Date, through to the end of the third quarter 2022 and to $685,000 in revenue generated from Orgad

for the three months ended September 30, 2022.

cost of revenues expenses for the nine and three months ended September 30, 2022 amounted to $1,607,000 and $877,000, respectively,

compared to none for the nine and three months ended September 30, 2021.

The cost of revenues includes cash and equity liabilities

expenses in the amount of $149,000 and $89,000 for the nine and three months ended September 30, 2022 respectively.

The increase in

comparison with the corresponding period was due to the cost of goods of the revenues generated from Orgad’s

and Development Expenses

Our research and development expenses

for the six months ended June 30, 2022 amounted to $802,000 compared to $3,380,000 for the six months ended June 30, 2021.

in comparison with the corresponding period primarily resulted from share-based payment in the amount of $2,618,000

that was recorded in the corresponding period attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement

dated May 26, 2021, and decrease in shared based expenses to employees.

Our research and development expenses

for the three months ended June 30, 2022 amounted to $390,000 compared to $3,007,000 for the three months ended June 30, 2021.

in comparison with the corresponding period primarily resulted from share-based payment in amount of $2,618,000

that was recorded in the corresponding period attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement

dated May 26, 2021 and decrease in shared based expenses to employees.

research and development expenses for the nine months ended September 30, 2022 amounted to $1,152,000 compared to $3,842,000 for the

nine months ended September 30, 2021.

The decrease in comparison with the corresponding period primarily resulted from share-based

payment in the amount of $2,618,000 that was recorded in the corresponding period attributed

to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021, and a

decrease in shared based expenses to employees.

research and development expenses for the three months ended September 30, 2022 amounted to $350,000 compared to $462,000 for the three

months ended September 30, 2021.

The decrease in comparison with the corresponding period primarily resulted from share-based payment

to employees.

and Marketing Expenses

Our sales and marketing expenses

for the six months ended June 30, 2022 amounted to $1,854,000 compared to $1,277,000 for the six months ended June 30, 2021.

in comparison with the corresponding period was mainly due to the hiring of new employees and expenses associated with Orgad activities,

sales and marketing expenses for the nine months ended September 30, 2022 amounted to $2,526,000 compared to $1,798,000 for the nine

months ended September 30, 2021.

The increase in comparison with the corresponding period was mainly due to the hiring of new employees

and expenses associated with Orgad activities, offset by a reduction in share-based payment expenses

to employees and consultants.

sales and marketing expenses for the three months ended September 30, 2022 amounted to $672,000 compared to $521,000 for the three months

ended September 30, 2021.

The increase in comparison with the corresponding period was mainly due to expenses associated with Orgad activities,

offset by a reduction in share-based payment expenses to employees and consultants.

Our sales and marketing expenses for the three months ended June 30, 2022

amounted to $895,000 compared to $731,000 for the three months ended June 30, 2021.

The increase in comparison with the corresponding

period was mainly due to expenses associated with Orgad activities, offset by a reduction in share-based

payment expenses to employees and consultants.

and Administrative Expenses

Our general and administrative

expenses for the six months ended June 30, 2022 amounted to $1,576,000 compared to $1,229,000 for the six months ended June 30, 2021.

The increase in comparison with the corresponding period was mainly due to professional services attributed to the Orgad acquisition expenses

associated with Orgad activities.

Our general and administrative

expenses for the three months ended June 30, 2022 amounted to $689,000 compared to $605,000 for the three months ended June 30, 2021.

The increase in comparison with the corresponding period was mainly due to professional services attributed to the Orgad expenses associated

with Orgad activities.

a result of the foregoing, for the six months ended June 30, 2022, our operating loss was $3,757,000 a decrease of $2,072,000

compared to our operating loss for the six months ended June 30, 2021 of $5,829,000.

a result of the foregoing, for the three months ended June 30, 2022, our operating loss was $1,652,000 a decrease of $2,661,000

compared to our operating loss for the three months ended June 30, 2021 of $4,313,000.

general and administrative expenses for the nine months ended September 30, 2022 amounted to $2,378,000 compared to $2,303,000 for the

nine months ended September 30, 2021.

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

with Orgad activities offset by a decrease in insurance expenses and professional services expenses.

general and administrative expenses for the three months ended September 30, 2022 amounted to $802,000 compared to $1,074,000 for the

three months ended September 30, 2021.

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

offset by an increase in expenses associated with Orgad activities.

a result of the foregoing, for the nine months ended September 30, 2022, our operating loss was $5,732,000 a decrease of $2,123,000 compared

to our operating loss for the nine months ended September 30, 2021 of $7,855,000.

As a result of the foregoing,

for the three months ended September 30, 2022, our operating loss was $1,975,000 a decrease of $51,000 compared to our operating loss

for the three months ended September 30, 2021 of $2,026,000.

Income (Expenses), Net

financial expense, net for the six months ended June 30, 2022 amounted to $147,000 compared to financial income of $32,000 for the six

months ended June 30, 2021.

During the six months ended June 30, 2022, we had financial expenses mainly from exchange rate differences

and revaluation of investment in marketable securities whereas in the corresponding period we had financial income primarily

financial expense, net for the nine months ended September 30, 2022 amounted to $198,000 compared to financial income of $50,000 for

the nine months ended September 30, 2021.

During the nine months ended September 30, 2022, we had financial expenses mainly from exchange

rate differences and revaluation of investment in marketable securities whereas in the corresponding period we had financial income primarily

due revaluation of investment in marketable securities.

financial expense, net for the three months ended June 30, 2022 amounted to $64,000 compared to financial expenses of $27,000 for the three

months ended June 30, 2021.

During the three months ended June 30, 2022, we had financial expenses mainly from exchange rate differences

and revaluation of investment in marketable securities whereas in the corresponding period we had financial expenses primarily

due revaluation of investment in marketable securities and exchange rate differences offset in income from revaluation of derivative.

a result of the foregoing, our net loss for the six months ended June 30, 2022 was $3,904,000, compared to net loss of $5,797,000 for

the six months ended June 30, 2021.

The decrease in the net loss was mainly due to the reasons mentioned above.

a result of the foregoing, our net loss for the three months ended June 30, 2022 was $1,716,000, compared to net loss of $4,340,000 for

the three months ended June 30, 2021.

The decrease in the net loss was mainly due to the reasons mentioned above.

financial expense, net for the three months ended September 30, 2022 amounted to $51,000 compared to financial income of $18,000 for

the three months ended September 30, 2021.

During the three months ended September 30, 2022, we had financial income mainly from exchange

rate differences and revaluation of investment in marketable securities whereas in the corresponding period we had financial expenses

primarily due revaluation of investment in marketable securities and exchange rate differences offset in income from revaluation of derivative.

a result of the foregoing, our net loss for the nine months ended September 30, 2022 was $5,930,000, compared to a net loss of

$7,805,000 for the nine months ended September 30, 2021.

The decrease in the net loss was mainly due to the reasons mentioned

a result of the foregoing, our net loss for the three months ended September 30, 2022 was $2,026,000, compared to a net loss of

$2,008,000 for the three months ended September 30, 2021.

The decrease in the net loss was mainly due to the reasons mentioned

and Capital Resources

1 unchanged sentence

and in the U.S.

As of June 30, 2022, we had cash,

cash equivalents, and restricted cash of $6,725,000 compared to $10,943,000 of cash, cash equivalents and restricted cash as of December

This decrease primarily resulted from our operating activities, the acquisition of Orgad, and resources that were deployed to

grow Orgad’s business.

used in operating activities amounted to $4,070,000 for the six months ended June 30, 2022, compared to $2,669,000 for the six

months ended June 30, 2021.

The increase in cash used in operating activities was mainly due to the acquisition of Orgad and

working capital.

cash used in investing activities was $325,000 for the six months ended June 30, 2022, compared to cash provided by investing

activities of $172,000 for the six months ended June 30, 2021.

The increase from the corresponding period was mainly due to the

acquisition of Orgad offset by changes in restricted deposits that occured in the six months ended June 30, 2021.

cash used in financing activities was $24,000 for the six months ended June 30, 2021, compared to cash provided by financing

activities of $5,832,000 for the six months ended June 30, 2021.

The cash flow from financing activities for the six months

ended June 30, 2021 resulted from the public offerings that occurred in January 2021 and March 2021 and from proceeds that were

received from an investor for warrants that were exercised.

of September 30, 2022, we had cash, cash equivalents, and restricted cash of $4,622,000 compared to $10,943,000 of cash, cash equivalents

and restricted cash as of December 31, 2021.

This decrease primarily resulted from our operating activities, the acquisition of Orgad,

and resources that were deployed to grow Orgad’s business.

used in operating activities amounted to $5,858,000 for the nine months ended September 30, 2022, compared to $3,984,000 for the nine

months ended September 30, 2021.

The increase in cash used in operating activities was mainly due to the acquisition of Orgad and working

cash used in investing activities was $327,000 for the nine months ended September 30, 2022, compared to cash provided by investing activities

of $172,000 for the nine months ended September 30, 2021.

The increase from the corresponding period was mainly due to the acquisition

of Orgad offset by changes in restricted deposits that occurred in the nine months ended September 30, 2022.

cash used in financing activities was $39,000 for the nine months ended September 30, 2022, compared to cash provided by financing activities

of $5,857,000 for the nine months ended September 30, 2021.

The cash flow from financing activities for the nine months ended September

30, 2021 resulted from the public offerings that occurred in January 2021 and March 2021 and from proceeds that were received from an

investor for warrants that were exercised.

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

1 unchanged sentence

Based on the projected

cash flows and cash balances as of June 30, 2022, we believe our existing cash will be sufficient to fund operations for a period less

than 12 months.

cash flows and cash balances as of September 30, 2022, we believe our existing cash will be sufficient to fund operations for a period

less than 12 months.

As a result, there is substantial doubt about our ability to continue as a going concern.

We will need to raise additional

capital, which may not be available on reasonable terms or at all.

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:

62 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis