What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-15 compared with 2022-11-14 · 188 added, 441 removed, 203 unchanged (76% of the section changed)

1 unchanged sentence

and Subsidiaries

of September 30, 2022

of March 31, 2023

Dollars in Thousands

AND ITS SUBSIDIARIES

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

Consolidated Interim Financial Statements as of March 31, 2023 (Unaudited)

Condensed Consolidated Interim Balance Sheets (Unaudited)

6 unchanged sentences

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

September 30,

Current Assets:

1 unchanged sentence

Restricted cash

Inventory, net

Account receivables

1 unchanged sentence

Total current assets

Long term deposit

Long term deposits

Property and equipment, net

Right-of-use asset

Intangible asset

Operating right-of-use asset

Intangible assets

Investment in JV

Investment in marketable securities

2 unchanged sentences

Current liabilities:

Account payables

Right of use liability

Operating lease liability

Bank overdraft and short-term loans

Trade payables

Liabilities to Related parties

Other payables

2 unchanged sentences

Deferred tax liabilities

Long term right of use liability

Operating lease liability

Total non-current liabilities

6 unchanged sentences

Issued and outstanding:

25,726,284 and 23,982,503 as of September 30, 2022 and December 31, 2021, respectively

2,446,780 and 1,464,117 as of March 31, 2023 and December 31, 2022, respectively

Additional paid-in capital

3 unchanged sentences

Total liabilities and stockholders’ equity

(*) Adjusted to give retroactive effect of 1:25 reverse stock split , see Note 1 (b)

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

2 unchanged sentences

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

Nine-Months Ended

September 30,

Three-Months Ended

September 30,

Cost of revenues

5 unchanged sentences

Operating loss

Financial income (expenses), net

Financial expenses, net

Equity income

of equity method investees

Loss before taxes

Taxes on income

Other comprehensive income (loss):

2 unchanged sentences

Basic and diluted loss per share

( 2.25 ) (** )

Basic and diluted weighted average number of shares outstanding

501,841 (** )

During the three month ended March 31, 2023, the Company recorded an inventory write-down of $ 643 due to the fire that occurred in its warehouse (see Note 7(a))

to give retroactive effect of 1:25 reverse stock split , see Note 1(b)

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

7 unchanged sentences

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

Issuance of shares in Business Combination ( * )

Issuance of shares business combination

Issuance of shares, net of issuance cost of $ 341 (**)

Exercise of warrants and prefunded warrants

Total comprehensive loss

Balance as of September 30, 2022

Balance as of March 31, 2023

Represents an amount less than $1

See Note 6(a).

Additional paid-in

3 unchanged sentences

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

Exercise of options granted to employees ( *)

Restricted shares issued to shareholder

Issuance of shares, net of issuance cost of $ 768

Exercise of warrants

Issuance of shares in Business Combination

Total comprehensive loss

Balance as of September 30, 2021

Balance as of March 31, 2022

an amount less than $1

other comprehensive

stockholders’

as of July 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 September 30, 2022

Represents an amount less than $1

Additional paid-in

1 unchanged sentence

Total stockholders’

Balance as of July 1, 2021

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

Exercise of options granted to employees *

Exercise of warrants

Balance as of December 31, 2021

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

Issuance of shares in Business Combination (*)

Issuance of shares post Business Combination (*)

Effect of reverse stock split (Note 10 (b)

Total comprehensive loss

Balance as of September 30, 2021

Balance as of December 31, 2022

an amount less than $1

3 unchanged sentences

dollars in thousands

Nine-Months Ended

September 30,

Three-Months Ended

Cash flows from operating activities:

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

Depreciation and amortization

Noncash lease expenses

Revaluation of derivatives

Change in operating lease right-of-use asset

Amortization of intangible assets

Change in warrants and derivatives

Change in liabilities to related parties

Interest of long-term liabilities

Interest paid

Revaluation of investment in marketable securities

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

Financing expenses

Change in Investment in JV

Stock based compensation

(Increase) in account receivables

Decrease in other receivables and prepaid expenses

(Increase) in inventory

Increase in other payables

(Decrease) in deferred tax liabilities

(Decrease) Increase in trade payables

Increase in account payables

Change in inventory

Change in deferred tax liabilities

Change in account receivable

Changes in operating lease liabilities

Change in other receivables and prepaid expenses

Change in trade payables

Change in account payables

Net cash used in operating activities

1 unchanged sentence

Acquisition of a subsidiary, net of cash acquired

Change in restricted deposits

Purchase of property and equipment

2 unchanged sentences

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

Loans received

Repayment of loans

Net cash provided by (used in) financing activities

5 unchanged sentences

Shares issued in Acquisition of a subsidiary

Restricted shares issued to shareholder

relates to change in cash and cash equivalents and, $ 2 to change in restricted cash.

8 unchanged sentences

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

the acquisition of Naizfit Bespoke Technologies, S.L (“Naizfit”) in October 2022, the Company expanded its offering outreach

and customer base.

the acquisition of Orgad International Marketing Ltd.

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

an omnichannel e-commerce platform.

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

e-commerce platform.

Company has five 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 and Naiz Bespoke Technologies,

S.L., a limited liability company incorporated under the laws of Spain (see note 9).

References to the Company include the subsidiaries unless

the context indicates otherwise.

the nine-month period ended September 30, 2022, the Company has incurred significant losses

of which are incorporated in Israel, My Size LLC which was incorporated in the Russian Federation, and Naiz Bespoke Technologies,

S.L., a limited liability company incorporated under the laws of Spain.

References to the Company include the subsidiaries

unless the context indicates otherwise.

the three-month period ended March 31, 2023, the Company has incurred significant losses

and negative cash flows from operations and has an accumulated deficit of $ 56,155 .

2 unchanged sentences

the foreseeable future.

Based on the projected cash flows and cash balances as of September 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 about the Company’s ability to continue as a going concern.

Based on the projected cash flows and cash balances as of March 31, 2023, 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

about the Company’s ability to continue as a going concern.

plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale

6 unchanged sentences

the Company fail to operate as a going concern.

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 nine months

ended September 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.

The extent 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

11 unchanged sentences

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

Operating results for the nine months ended September 30, 2022 are

not necessarily indicative of the results that may be expected for any future period or for the year ending December 31, 2022.

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

to Condensed Consolidated Interim Financial Statements (Unaudited)

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

2 - Significant Accounting Policies (cont.)

Operating results for the three months ended March 31, 2023 are not

necessarily indicative of the results that may be expected for any future period or for the year ending December 31, 2023.

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, 2022.

Accounting Policies:

significant accounting policies followed in the preparation of these unaudited interim condensed consolidated financial statements

are identical to those applied in the preparation of the latest annual financial statements, except the following new policies which

were adopted following the business combination (see note 6):

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.

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

selling products to customers, and (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”).

with a customer exists only when:

the parties to the contract have approved it and are committed to perform their respective obligations,

the Company can identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”),

the Company can determine the transaction price for the goods or services to be transferred, the contract has commercial substance and

it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods or services that

will be transferred to the customer.

AND ITS SUBSIDIARIES

to Condensed Consolidated Interim Financial Statements (Unaudited)

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

2 - Significant Accounting Policies (cont.)

versus Agent Considerations

Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers,

by assessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal)

or to arrange for those goods to be provided by the other party (agent).

With regard to products being sold by Orgad through Amazon,

this determination involves judgment.

The Company determined it is a principal, as it has determined that it controls the promised product

before it is transferred to the end customers, it is primarily responsible for fulfilling the promise to provide the goods, and it has

discretion in establishing prices.

Therefore, the revenues are recorded on a gross basis.

Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration

to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values.

of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

When determining the fair values of assets acquired and liabilities assumed, the Company estimated the future expected cash flows from

acquired platform from a market participant perspective, useful lives and discount rates.

In addition, management makes significant estimates

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 platforms from

a market participant perspective, useful lives and discount rates.

Management’s estimates of fair value are based upon assumptions

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.

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

Under ASC 350, “Intangible - Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment

350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter ,

or between annual tests in certain circumstances, and written down when impaired.

Goodwill is tested for impairment by comparing the

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

to perform the two-step quantitative goodwill impairment test.

If the qualitative assessment does not result in a more likely than not

indication of impairment, no further impairment testing is required.

If it does result in a more likely than not indication of impairment,

the two-step impairment test is performed.

Goodwill is not deductible for income tax purposes.

Goodwill is allocated to the fashion and

equipment e-commerce platform segment.

Alternatively ,

ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the first step

of the goodwill impairment test.

There were no impairment charges to goodwill during the period presented.

AND ITS SUBSIDIARIES

to Condensed Consolidated Interim Financial Statements (Unaudited)

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

2 - Significant Accounting Policies (cont.)

assets consist of identifiable intangible assets that the Company has acquired from previous business combinations.

Intangible assets

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.

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

amortization method.

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

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

warrant a revision to the remaining period of amortization

of estimates:

preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the

amounts reported and disclosed in the financial statements and the accompanying notes.

Actual results could differ materially from these

significant accounting policies followed in the preparation of these unaudited interim condensed consolidated financial statements are

identical to those applied in the preparation of the latest annual financial statements.

AND ITS SUBSIDIARIES

2 unchanged sentences

3 - Financial Instruments

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.

carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, other receivables, trade payables and accounts

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

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

4 unchanged sentences

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

September 30, 2022

March 31, 2023

Fair value hierarchy

1 unchanged sentence

Investment in marketable securities (*)

September 30, 2022

Fair value hierarchy

Financial liabilities

AND ITS SUBSIDIARIES

6 unchanged sentences

Investment in marketable securities (*)

the nine and three-month periods ended September 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 ($ 28 ) and $( 17 ), and $ 46 and $ 24 respectively.

financial assets (**)

the three-month periods ended March 31, 2023 and 2022, the Company 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 $( 14 ), respectively.

financial asset includes in other receivables.

December 31, 2022

5 unchanged sentences

of Stock Based Compensation Expenses

Nine months ended

September 30,

Three months ended

September 30,

Stock-based compensation expense – Cost of revenues

3 unchanged sentences

Stock-based compensation

issued to consultants:

July 2019, the Company entered into a three-year agreement with a consultant (“Consultant14”) to provide services to

the Company including assisting the Company to promote, market and sell the Company’s technology to potential customers.

to such agreement and in partial consideration for such consulting services, the Company agreed to issue to Consultant14 options

to purchase up to 2,667 shares of the Company’s common stock upon execution of the agreement.

The options are exercisable at

$ 15.00 per share and shall vest in 3 equal instalments every twelve months starting July 2019.

Unexercised options shall expire 4

years from the effective date.

AND ITS SUBSIDIARIES

2 unchanged sentences

4 - Stock Based Compensation (Cont.)

addition, the Company agreed to issue to Consultant14 options to purchase up to 22,233 shares of the Company’s common stock

upon execution of the agreement.

The options are exercisable at $ 1.08 per share and shall vest in 4 equal instalments every six months

starting September 2020.

Unexercised options shall expire 5 years from the effective date.

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

respectively, were recorded by the Company as

stock-based equity awards with respect to Consultant 14.

Option Plan for Employees:

6 unchanged sentences

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

per share, which was the closing price for the

Company’s common stock on May 22, 2020, and extended the term of the foregoing options for an additional one year from the original

date of expiration.

The incremental compensation cost resulting from the repricing was $ 53 ,

and the expenses during the nine-month period ended September 30, 2022 and 2021 were $ 2

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.

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.

December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive

Plan from 230,800 shares to 289,000 shares.

September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017

2017 Equity Incentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier

Brandwain (CCO), pursuant to which were issued 2,500,000

restricted shares, 600,000

restricted shares, 400,000

restricted shares and 300,000

restricted shares, respectively.

Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the

“Agreement”).

restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or

Kles, Billy Pardo and Ilia Turchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain,

conditioned upon continuous employment with the Company, and subject to accelerated vesting upon a change in control of the

On the same day, the Company

granted five-year

options to purchase up to 250,000

ordinary shares to other employees of the Company at an exercise price of $ 0.21

Equity Incentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO),

pursuant to which were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares

and 12,000 restricted shares, respectively.

Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement.

The restricted shares vest in three equal installments on January 1, 2023, January 1, 2024 and January

1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and Ilia Turchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for

Ezequiel Javier Brandwain, conditioned upon continuous employment with the Company, and subject to accelerated vesting upon a change

in control of the Company.

the same day, the Company granted five-year options to purchase up to 10,000 ordinary shares to other employees of the Company at an

exercise price of $ 5.25 per share.

The options vest in over three years in three equal portions from the vesting commencement date.

fair value of each option award is estimated on the date of grant using the Binomial option-pricing model that used the weighted average

assumptions in the following table.

The risk free rate for the expected term of the option is based on the U.S.

Treasury yield curve

in effect at the time of grant.

Schedule of Fair Value

Assumptions of Stock Options

Dividend yield

Expected volatility

Risk-free interest

Contractual term of up to (years)

Suboptimal exercise multiple (NIS)

the nine and three-month period ended September 30, 2022, the Company granted 4,650,000 restricted stock and 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 nine and three-month period ended September 30, 2022 and 2021 which was recorded was

$ 53 and $ 234 , and $ 9 and $ 312 , respectively.

the three-month period ended March 31, 2023, the Company did not grant any stock options under the 2017 Employee Plan, no options

were exercised and options to purchase 26,600 shares of common stock expired.

total stock option compensation expense during the three-month period ended March 31, 2023 and 2022 which was recorded was $ 101 and $ 234 ,

respectively.

AND ITS SUBSIDIARIES

2 unchanged sentences

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

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

August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”)

in the Supreme Court of the State of New York, County of New York for breach of a Securities

Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount

to be determined at trial, but in no event less than $ 616,000 .

On August 2, 2018, North Empire

filed a Summons with Notice against the Company, also in the same Court, in which they allege

damages in an amount of $ 11.4 million arising from an alleged breach of the Agreement.

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

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 Company filed its appellant brief on or about October 26, 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 September 12, 2022 the Court issued

its decision and order denying the Company’s motion to reargue.

North Empire is due to file its opposing brief on or about December 7, 2022.

On December 30, 2021, the Court denied both the Company 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 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 judgment.

North Empire will file its opposition papers on or before March 31, 2022,

and the Company will file reply papers on April 29, 2022.

On or about September 12, 2022,

the Court issued its Decision and Order denying the Company’s motion to reargue.

Empire filed its opposing brief on December 7, 2022.

Both sides were given an opportunity

to file a reply brief.

The Company filed our reply brief on January 4, 2023 and North Empire

filed its reply brief on January 13, 2023.

The Appellate Court has scheduled oral argument

for the appeal for February 7, 2023.

Oral argument was held before the Appellate Court on

February 7, 2023.

On or about February 28, 2023, the Appellate Court filed its Decision and

Order, which affirmed the lower court’s decisions regarding both the Company and North

Empire’s motions for summary judgment and sent the case back to the Supreme Court.

or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate.

A date for the mediation has not yet been set.

The Company intends to vigorously defend any claims made by North Empire.

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

July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd.

and Dror Atzmon in the Magistrate’s

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

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

The first court preliminary hearing was held on March 1, 2022.

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.

AND ITS SUBSIDIARIES

1 unchanged sentence

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

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.

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 September 30,

2022 were $ 1,797 and for the three-month period ended

September 30, 2022 were $ 685 .

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 the Acquisition

of shares of common stock ( 1,743,781 shares) (**)

consideration transferred

cash payment is subject to working capital adjustments.

price as of the 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 instalments certain revenue targets are met and subject further

to certain downward post-closing adjustment.

Furthermore, 1,743,781 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 % of the operating profit of Orgad for the years 2022 and

2023 will also be paid.

All of these payments are subject to the former owners being actively engaged with Orgad at the date such payment

is due, and therefore were not taken as part of the consideration for the business combination.

the nine and three-month period ended September 30, 2022 an amount of $ 328 and $ 201 was recorded in respect of the cash instalments respectively,

and $ 267 and $ 156 in respect of stocks issuance, respectively.

Identifiable assets acquired and liabilities assumed

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

techniques based on estimates and assumptions made by management at the time of the acquisition.

Such estimates are subject to change

during the measurement period which is not expected to exceed one year.

The purchase price allocation was not finalized duo to examination

of the net working capital of Orgad at the acquisition date.

Any adjustments to the preliminary purchase price allocation identified

during the measurement period will be recognized in the period in which the adjustments are determined.

AND ITS SUBSIDIARIES

to Condensed Consolidated Interim Financial Statements (Unaudited)

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

6 – Business Combination (Cont.)

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

Schedule of Fair Value of Assets Acquired and Liabilities

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 life of the selling platform is three years .

During the nine and three-month period ended September 30,2022 an

amount of $ 84 and $ 32 was recorded in respect of amortization expenses.

Acquisition-related

Company incurred transaction costs of approximately $ 55 and none during the nine-month and three-month period ended September 30, 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

to Condensed Consolidated Interim Financial Statements (Unaudited)

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

6 – Operating Segments

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 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.

a result of the business combination in the reporting period (see Note 6), the Company has three reportable segments:

(i) fashion and

equipment e-commerce platform, and (ii) SaaS based innovative artificial intelligence driven measurement solutions and (iii) Naiz SaaS

based innovative artificial intelligence driven measurement solutions and.

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 and My Size LLC.

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

of Reportable Operating Segments

Fashion and equipment e-commerce platform

For the nine months ended September 30, 2022

Operating (loss) income

For the three months ended September 30, 2022

Operating (loss) income

and equipment e-commerce platform

September 30, 2022:

Note 8 – Significant events during the reporting

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

result of complaints submitted due to an error in the listed manufacturer of certain products on Orgad’s store.

Orgad resolved

the complaints and the account was reinstated during September.

During the deactivation period, Orgad generated revenues through

other sales channels.

In August 2022, the Company established a joint venture

(“JV”) in Brazil with Santista Têxtil.

The Company holds 51% and Santista Têxtil holds 49% of the JV.

purpose of the JV is to serve the Brazilian market according to the business plan that was set.

Both parties agree to make an initial investment in the JV of 1 million

BRL per the holding percentage.

As of the reporting date, the JV is in process of establishing its operation.

of the three month ended March 31, 2023

from external customers

(loss) income

and equipment e-commerce platform

of March 31, 2023:

and equipment e-commerce platform

of the year ended December 31, 2022

from external customers

(loss) income

and equipment e-commerce platform

of December 31, 2022:

7 – Significant events during the reporting period

On January 2, 2023, Orgad experienced a fire at its warehouse in Israel.

The Company is not aware of any casualties or injuries associated with the fire.

The Company shifted Orgad’s operation to its headquarters.

The value of the inventory that was in the warehouse was approximately $ 640,000 .

The Company believes that this incident did not affect

the future sales results of Orgad for the year of 2023.

The inventory was not insured, the Company and lessor signed an agreement to settle

the issue in which the Company paid to the lessor an amount of $ 50,000 to cover his loss.

January 10, 2023, the Company entered into a securities purchase agreement pursuant to which

the Company sold an aggregate of 162,000 of the Company’s shares of common stock and

pre-funded warrants to purchase up to 278,899 shares of common stock and, in a concurrent

private placement, unregistered warrants to purchase up to 883,798 shares of common stock,

consisting of Series A warrants to purchase up to 441,899 shares of common stock and Series

B warrants to purchase up to 441,899 shares of common stock, at an offering price of $ 3.055

per share of common stock and associated Series A and Series B warrants and an offering price

of $ 3.054 per pre-funded warrant and associated Series A and Series B warrants.

addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a private

placement an aggregate of up to 540,098 unregistered pre-funded warrants and unregistered warrants to purchase up to an aggregate

of 1,080,196 shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series

B warrants to purchase up to 540,098 shares of common stock at an offering price of $ 3.054 per pre-funded warrant and associated

Series A and Series B warrants.

of March 31,2023, all the pre funded warrants were exercised by the investor.

8 – Subsequent events

On October 7, 2022, the Company entered into Share Purchase Agreement

(the “Agreement”) with the five shareholders of Naiz Fit (the “Sellers”), pursuant to which the Sellers agreed to

sell to the Company all of the issued and outstanding shares of Naiz Bespoke Technologies, S.L., a limited liability company incorporated

under the laws of Spain (“Naiz”).

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

In consideration of the purchase

of the shares of Naiz, the agreement provides that the Sellers are entitled to receive (i) an aggregate amount of 6,000,000

shares (the “Equity Consideration”) of the Company’s common stock (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 “Cash Consideration”).

The Company shall make an additional

cash payment (the “Shortfall Value”) of $ 459,240 to the Sellers within 45 days of the Company’s receipt of Naiz’s

2025 audited financial statements;

provided that certain revenue targets are met.

The Cash Consideration will be paid to the

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 the Company’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of the Company’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

the Company’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 the Company’s receipt of Naiz’s 2024 audited financial statements;

provided that in the case of the second,

third, fourth and fifth installments certain revenue targets are met.

The payment of the second, third,

fourth and fifth cash installments are further subject to the continuing employment or involvement of two of the shareholders which

holds key position 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 Agreement).

The required information for purchase price allocation in accordance with

the FASB ASC Topic 805 is not fully presented because the initial accounting of the business combination not yet completed as of the date

of the financial statements, due to the short period since acquisition and since the acquiree accounting records are not yet final.

May 2023, the Company initiated a transfer of the support, development and customer success operations to its recently acquired

Spanish entity, Naiz Fit, that is intended to improve efficiency and lower costs between the Company’s operations in Israel

and Naiz Fit.

As part of this, the Company reduced headcount by 13 persons in Israel, including the termination of its Chief

Commercial Officer, Ezequiel Javier Brandwain.

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