What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-15 compared with 2022-11-14 · 158 added, 235 removed, 117 unchanged (77% 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

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

of operations and financial condition for the periods described.

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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

31, 2022, filed with the Securities and Exchange Commission on April 14, 2023, or the Annual Report, including the consolidated annual

financial statements as of December 31, 2022 and their accompanying notes included therein.

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terms, or at all;

ability to continue as a going concern;

related to the COVID-19 pandemic;

related to our ability to continue as a going concern;

new and unproven nature of the measurement technology markets;

ability to achieve customer adoption of our products;

dependence on assets we purchased from a related party and the risk that such assets may in the future be repurchased;

ability to realize the benefits of our acquisitions of Orgad and Naiz;

dependence on assets we purchased from a related party;

ability to enhance our brand and increase market awareness;

5 unchanged sentences

or future litigation;

or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated

liquidity risk;

impact of the political and security situation in Israel on our business.

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may cause actual results to differ materially from those contained in any forward-looking statements.

We qualify all of the information

presented in this Quarterly Report on Form 10-Q, and particularly our forward-looking statements, by these cautionary statements.

the context otherwise requires, all references to “we,” “us,” “our” or “the Company”

in this Quarterly Report on Form 10-Q are to My Size, Inc.

a Delaware corporation, and its subsidiaries, including MySize Israel

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

verticals, including the e-commerce fashion/apparel, shipping/parcel and do it yourself, or DIY, industries.

Utilizing our sophisticated

algorithms within our proprietary technology, we can calculate and record measurements in a variety of novel ways, and most importantly,

increase revenue for businesses across the globe.

solutions can be utilized to accurately take measurements of a variety of items via a mobile device.

By downloading the application to

a smartphone, the user is then able to run the mobile device over the surface of an item the user wishes to measure.

The information

is then automatically sent to a cloud-based server where the dimensions are calculated through our proprietary algorithms, and the accurate

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

We believe that the commercial applications

for this technology are significant in many areas.

we are mainly focusing on the e-commerce fashion/apparel industry.

In addition, our solutions address the shipping/parcel and DIY uses

we rollout our products to major retailers and apparel companies, there is a lead time for new customers to ramp up before we can recognize

This lead time varies between customers, especially when the customer is a tier 1 retailer, where the integration process may

Generally, first we integrate our product into a customer’s online platform, which is followed by piloting and implementation,

and, assuming we are successful, commercial roll-out, all of which takes time before we expect it to impact our financial results in

a meaningful way.

While we have begun generating initial sales revenue, we do not expect to generate meaningful revenue during the upcoming

Because of the numerous risks and uncertainties associated with the success of our market penetration and our dependence on

the extent to which MySizeID is adopted and utilized, we are unable to predict the extent to which we will recognize revenue.

be unable to successfully develop or market any of our current or proposed products or technologies, those products or technologies may

not generate any revenues, and any revenues generated may not be sufficient for us to become profitable or thereafter maintain profitability.

February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar

Guy Shalom and Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued

and outstanding equity of Orgad.

operates an omnichannel e-commerce platform engaged in online retailing in the global market.

It operates as a third-party seller on

Amazon.com, eBay and others.

Orgad currently manages more than 1,000 stock-keeping units, or SKUs, mainly in fashion, apparel and shoes,

but is capable of managing tens of thousands of SKUs.

Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad.

In consideration of the shares of Orgad, the Orgad

Sellers are entitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 2,790,049 shares,

or the Orgad Equity Consideration, of our common stock, and (iii) earn-out payments of 10% of the operating profit of Orgad for the years

2022 and 2023.

The transaction closed on the same day.

Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule:

which we paid upon closing, (ii) $350,000 payable on the two-year anniversary of the closing, and (iii) $350,000 payable on the three-year

anniversary of the closing, 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.

Equity Consideration is payable to the Orgad Sellers according to the following payment schedule:

(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.

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

Sellers being actively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating

to material reduction of salary or adverse change in their position with Orgad or its affiliates).

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.

Specifically, we undertake

some of our sales and marketing using personnel located in Russia.

To date, the invasion of Ukraine by Russia has not had a material

impact on our business.

in this Quarterly Report on Form 10-Q are to MySize, Inc., a Delaware corporation, and its subsidiaries, including MySize Israel 2014

My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L, or Naiz, taken as a whole.

dollars” and “$” are to currency of the United States of America, and references to “NIS”

are to New Israeli Shekels.

Unless otherwise indicated, U.S.

dollar translations of NIS amounts presented in this Quarterly Report on

Form 10-Q for three months ended on March 31, 2023 are translated using the rate of NIS 3.615 to $1.00.

information in this Quarterly Report on Form 10-Q relating to shares or price per share reflects the 1-for-25 reverse stock split effected

by us on December 8, 2022.

are an omnichannel e-commerce platform and provider of AI-driven apparel sizing and digital experience solutions that drive revenue growth

and reduce costs for our business clients for online shopping and physical stores.

flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate

fitting apparel by using our application on their mobile phone or through MySizeID Widget:

a simple questionnaire which uses a database

collected over the years.

syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application,

and only presents items for purchase that match their measurements to ensure a correct fit.

are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry

Our other product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams,

which are designed to increase end consumer satisfaction, contributing to a sustainable world and reduce operation costs.

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

We are not aware of any casualties or injuries associated with

We shifted Orgad’s operation to its headquarters.

The value of the inventory that was in the warehouse was

approximately $640,000.

We believe that this incident did not affect the future sales results of Orgad for the year of 2023.

inventory was not insured and we and the lessor signed an agreement to settle the issue in which we paid to the lessor an amount of

$50,000 to cover his loss.

2023 Financing

January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell

and issue in the RD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and pre-funded warrants, or the

Pre-funded Warrants, to purchase up to 279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to

purchase up to 883,798 shares of common stock, or the RD Warrants, consisting of Series A warrants, or Series A Warrants, to purchase

up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, to purchase up to 441,899 shares of common stock, at

an offering price of $3.055 per RD Share 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, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement,

the Purchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering 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, or the PIPE Warrants

and together with the RD Warrants, the Warrants, 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.

Pre-funded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full.

The Warrants are immediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein.

The Series A Warrants have a term of five and one-half years from the date of issuance and the Series B Warrants have a term of 28 months

from the date of issuance.

The Warrants may be exercised on a cashless basis if there is no effective registration statement registering

the shares underlying the warrants.

connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement.

to the Registration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the

Securities and Exchange Commission, or the SEC, to register for resale the shares issuable upon exercise of the unregistered Pre-funded

Warrants and the Series A and Series B Warrants, within 20 days of the signing date of the PIPE Purchase Agreement, or the Signing Date,

and to have such Registration Statement declared effective within 60 days after the Signing Date in the event the Registration Statement

is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by the SEC.

obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.

Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisions

customary for transactions of this nature.

In addition, subject to limited exceptions, the Purchase Agreements provide that for a period

of one year following the closing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction”

as defined in the Purchase Agreements.

gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement

agent and other offering expenses payable by the Company.

also entered into a letter agreement, or the Engagement Agreement, with H.C.

Wainwright & Co., LLC, or Wainwright, pursuant to which

Wainwright agreed to serve as the exclusive placement agent for the Company in connection with the Offerings.

We paid Wainwright a cash

placement fee equal to 7% of the aggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds

raised in the Offerings, a non-accountable expense allowance of $85,000 and clearing fees of $15,950.

Wainwright also received placement

agent warrants, or the Placement Agent Warrants, with substantially the same terms as the Series A Warrants issued in the Offering in

an amount equal to 7% of the aggregate number of Shares and Pre-funded Warrants sold in the Offerings, or 68,740 shares, at an exercise

price of $3.8188 per share and a term expiring on January 10, 2028.

in Workforce to Increase Operational Efficiency

May 2023, we initiated a transfer of the support, development and customer success operations to our recently acquired Spanish entity,

Naiz Fit, that is intended to improve efficiency and lower costs between our operations in Israel and Naiz Fit.

As part of this, we reduced headcount by 13 persons in Israel, including the termination of our Chief Commercial Officer, Ezequiel Javier Brandwain.

In addition to our Israel operations, we have operations

in Russia through our wholly owned subsidiary, My Size LLC.

Specifically, we undertake some of our sales and marketing using personnel

located in Russia.

To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions, we scaled back and we expect to

close down our subsidiary operations in the near future.

of Operations

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Three months ended

Nine months ended

(dollars in thousands)

Cost of revenues

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Operating loss

Financial income (expenses), net

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

Financial expenses, net

Equity accounted losses

Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

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

losses to perform further research and development activities.

We started to generate revenues only in 2019.

Our revenues for the

three months ended March 31, 2023 amounted to $720,000 compared to $404,000 for the three months ended March 31, 2022.

from the corresponding period primarily attributable to Orgad that was consolidated for 3 months as opposed to 2 months in the

corresponding period and revenue generated from the Naiz.

In addition, the increase from the corresponding period results from an

increase in revenues generated by My Size.

of revenues expenses for the three months ended March 31, 2023 amounted to $1,147 compared to $251,000 for the three months ended March

The increase in comparison with the corresponding period was mainly due to an inventory mark-down of $643,000 due to the fire

that occurred in its warehouse during January 2023.

and Development Expenses

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.

Our research and development expenses

for the three months ended March 31, 2023 amounted to $342,000 compared to $412,000 for the three months ended March 31, 2022.

from the corresponding period primarily resulted decrease in subcontractor expenses.

and Marketing Expenses

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 March 31, 2023 amounted to $679,000 compared to $959,000 for the three months ended March 31, 2022.

primarily resulted from a decrease in consultants expenses, Travel and marketing expenses offset by an increase in Amazon fees.

and Administrative Expenses

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.

Our general and administrative

expenses for the three months ended March 31, 2023 amounted to $1,044,000 compared to $887,000 for the three months ended March 31, 2022.

The increase compared to the corresponding period was mainly due to an increase in employee salaries mainly due to the Orgad and Naiz

acquisitions and an increase in professional expenses.

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.

for the three months ended March 31, 2023, our operating loss was $2,492,000 an increase of $387,000 or 18.3%, compared to our operating

loss for the three months ended March 31, 2022 of $2,105,000.

Income (Expenses), Net

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 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

Our financial expense, net for

the three months ended March 31, 2023 amounted to $146,000 compared to financial expense of $83,000 for the three months ended March 31,

2022 The increase compared to the corresponding period was mainly due to an increase in financial expenses exchange rate differences.

a result of the foregoing, our net loss for the three months ended March 31, 2023 was $2,654,000, compared to net loss of $2,188,000

for the three months ended March 31, 2022.

The increase in net loss was mainly due an increase in cost of sales and an

inventory mark-down of $643,000 due to the fire that occurred in its warehouse during January 2023 and the reasons mentioned above.

and Capital Resources

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and in the U.S.

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

of March 31, 2023, we had cash, cash equivalents, and restricted cash of $2,676,000 compared to $2,363,000 of cash, cash equivalents

and restricted cash as of December 31, 2022.

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.

expect that we 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 September 30, 2022, we believe our existing cash will be sufficient to fund operations for a period

less than 12 months.

This increase primarily resulted from a public and private offerings that we completed

in January 2023 offset by our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed to grow

of both businesses.

used in operating activities amounted to $2,313,000 for the three months ended March 31, 2023, compared to $2,579,000 for the three

months ended March 31, 2022.

The decrease in cash used in operating activity is derived mainly from a decrease in trade payables and

inventory offset by an increase in the net loss.

We did not have net cash used

in investing activities for the three months ended March 31, 2023, compared to cash used in investing activities of $321,000 for the three

months ended March 31, 2022.

Net cash provided by financing

activities was $2,676,000 for the three months ended March 31, 2023, compared to $7,000 for the three months ended March 31, 2022.

cash flow from financing activities for the three months ended March 31, 2023 resulted from the public and private offering that occurred

in January 2023.

that we 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, 2023, , we believe our existing cash will not be sufficient to fund operations for a period of

more 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:

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

conditions, the impact of the COVID-19 pandemic, the Russian invasion of Ukraine, and a number of other factors, many of which are outside

our control, and on our financial performance.

Accordingly, we cannot assure you that we will be able to successfully raise additional

capital at all or on terms that are acceptable to us.

If we cannot raise additional capital when needed, it may have a material adverse

effect on our business, results of operations and financial condition.

conditions, the Russian invasion of Ukraine, and a number of other factors, many of which are outside our control, and on our financial

Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are

acceptable to us.

If we cannot raise additional capital when needed, it may have a material adverse effect on our business, results of

operations and financial condition.

the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities

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significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial

statements appearing elsewhere in this Quarterly Report on Form 10-Q.

We believe that these accounting policies discussed are critical

to our financial results and to the understanding of our past and future performance, as these policies relate to the more significant

areas involving management’s estimates and assumptions.

statements included herein.

We believe these accounting policies discussed below are critical to our financial results and to the understanding

of our past and future performance, as these policies relate to the more significant areas involving management’s estimates and

We consider an accounting estimate to be critical if:

(1) it requires us

to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time we

were making our estimate;

and (2) changes in the estimate could have a material impact on our financial condition or results of operations.

(1) it requires us to make assumptions because information was not

available at the time or it included matters that were highly uncertain at the time we were making our estimate;

and (2) changes in the

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

Quantitative and Qualitative Disclosure About Market Risk.

1 unchanged sentence

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