What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-14 compared with 2023-08-14 · 152 added, 114 removed, 225 unchanged (54% of the section changed)

69 unchanged sentences

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 Fit, taken as a

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

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

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dollar translations of NIS amounts presented in this Quarterly Report on

Form 10-Q for three months ended on June 30, 2023 are translated using the rate of NIS 3.700 to $1.00.

Form 10-Q for three months ended on September 30, 2023 are translated using the rate of NIS 3.824 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 SaaS measurement solutions, including MySizeID and our recently

acquired subsidiaries, Naiz Fit, which provides SaaS technology solutions that solve size and fit issues and AI solutions for

smarter design through data driven decisions for fashion ecommerce companies, and Orgad, an online retailer operating in the global

To date, we have generated almost all our revenue as a third-party seller on Amazon.

Our advanced software and

solutions assists us in supply chain, identifying products that can drive growth and provides a user-friendly experience and best

customer service.

Our 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 the MySizeID Widget:

a simple questionnaire which uses a database collected over the years.

are an omnichannel e-commerce platform and provider of AI-driven SaaS measurement solutions, including MySizeID and our recently acquired

subsidiaries, Naiz Fit, which provides SaaS technology solutions that solve size and fit issues and AI solutions for smarter design through

data driven decisions for fashion ecommerce companies, and Orgad, an online retailer operating in the global markets.

To date, we have

generated almost all our revenue as a third-party seller on Amazon.

Our advanced software and solutions assists us in supply chain, identifying

products that can drive growth and provides a user-friendly experience and best customer service.

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 the 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 a provider of a new digital experience due to recent technological developments

for the fashion industry needs.

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 reducing

operation costs.

are positioning ourselves as a consolidator of sizing solutions and a provider of a new digital experience due to recent technological

developments for the fashion industry needs.

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 reducing 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 the fire.

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.

The value of the inventory that was in the warehouse was approximately

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

The inventory was not insured, 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.

The inventory was not

insured, 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

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without significant impact on revenues.

In addition, during 2023, Orgad made a strategic shift to utilizing Fulfillment by Amazon (FBA) rather than fulfilling

directly, reducing exposure to inventory risk and contributing to operating efficiencies.

July 13, 2023, the compensation committee of our board of directors reduced the exercise price of outstanding options of certain

officers and directors for the purchase of an aggregate of 23,575 shares of common stock (with exercise prices of $26.00 per share)

to $1.09 per share, which was the closing price for our shares of common stock on the Nasdaq Capital Market on July 13, 2023.

exercise price reduction includes options held by, among others, our named executive officers with respect to the following number

(i) Ronen Luzon, the Company’s Chief Executive Officer and director:

8,001 shares, (ii) Or Kles, the

Company’s Chief Financial Officer:

5,760 shares, and (iii) Billy Pardo, the Company’s Chief Operating Officer and Chief

Product Officer:

addition, during 2023, Orgad made a strategic shift to utilizing Fulfillment by Amazon (FBA) rather than fulfilling directly, reducing

exposure to inventory risk and contributing to operating efficiencies.

July 13, 2023, the compensation committee of our board of directors reduced the exercise price of outstanding options of certain officers

and directors for the purchase of an aggregate of 23,575 shares of common stock (with exercise prices of $26.00 per share) to $1.09 per

share, which was the closing price for our shares of common stock on the Nasdaq Capital Market on July 13, 2023.

The exercise price reduction

includes options held by, among others, our named executive officers with respect to the following number of shares:

(i) Ronen Luzon,

the Company’s Chief Executive Officer and director:

8,001 shares, (ii) Or Kles, the Company’s Chief Financial Officer:

shares, and (iii) Billy Pardo, the Company’s Chief Operating Officer and Chief Product Officer:

6,094 shares.

August 24, 2023, we entered into an inducement offer letter agreement, or the Inducement Letter, with a certain holder, or the Holder,

of certain of our existing warrants to purchase up to (i) 1,963,994 shares of our common stock issued on January 12, 2023 at an exercise

price of $2.805 per share, or the January 2023 Warrants, (ii) 6,864 shares of our common stock issued on January 17, 2020 at an exercise

price of $94.00 per share, or the January 2020 Warrants, and (ii) 47,153 shares of our common stock issued on October 28, 2021 at an

exercise price of $31.50 per share, having terms ranging from 28 months to five and one-half years, or the October 2021 Warrants and

together with the January 2023 Warrants and the January 2020 Warrants, the Existing Warrants.

to the Inducement Letter, the Holder agreed to exercise for cash its Existing Warrants to purchase an aggregate of 2,018,012 shares of

our common stock at a reduced exercise price of $2.09 per share in consideration of our agreement to issue new common stock purchase

warrants, or the New Warrants, as described below, to purchase up to an aggregate of 5,367,912 shares of our common stock, or the New

Warrant Shares, at an exercise price of $2.09 per share.

We received aggregate gross proceeds of approximately $4.2 million from the

exercise of the Existing Warrants by the Holder, before deducting placement agent fees and other offering expenses payable by us.

closing of the transaction contemplated by the Inducement Letter closed on August 28, 2023.

also engaged Wainwright, or the Placement Agent, to act as our exclusive placement agent in connection with the transactions contemplated

by the Inducement Letter.

We also issued to the Placement Agent warrants, or the Placement Agent Warrants, to purchase up to 141,261

shares of our common stock (representing 7.0% of the Existing Warrants that were exercised), which will have the same terms as the New

Warrants except the Placement Agent Warrants will have an exercise price equal to $2.6125 per share (125% of the reduced exercise price

of the Existing Warrants).

Similar to the New Warrants, the Placement Agent Warrants will be immediately exercisable on or after the

Stockholder Approval Date (as defined in the New Warrants).

The issuance of the New Warrant Shares is subject to stockholder approval

under applicable rules and regulations of The Nasdaq Capital Market, or the Stockholder Approval.

The Stockholder Approval has been included

as an agenda item at our upcoming annual meeting of stockholders to be held on December 27, 2023, or the 2023 Annual Meeting, and is

further described in our preliminary proxy statement with respect to the 2023 Annual Meeting as filed with the U.S.

Securities and Exchange

Commission on November 14 2023.

If the event that the Stockholder Approval is not approved by our stockholders at the 2023 Annual

Meeting, we have agreed to call a meeting every 90 days thereafter to seek Stockholder Approval until the earlier of the date on which

Stockholder Approval is obtained or the Inducement Warrants are no longer outstanding.

Upon any exercise for cash of any New Warrants,

we have agreed to issue the Placement Agent warrants representing 7.0% of the shares of common stock underlying such New Warrants.

Hamas-Israel War

October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian

and military targets.

Hamas also launched extensive rocket attacks on the Israeli population and industrial centers located along Israel’s

border with the Gaza Strip and in other areas within the State of Israel.

These attacks resulted in thousands of deaths and injuries,

and Hamas additionally kidnapped many Israeli civilians and soldiers.

Following the attack, Israel’s security cabinet declared

war against Hamas and commenced a military campaign against Hamas and other terrorist organizations in parallel to their continued rocket

and terror attacks.

We cannot currently predict the intensity or duration of Israel’s war against Hamas, nor can we predict how

this war will ultimately affect our business and operations or Israel’s economy in general.

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)

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Cost of revenues

Gross profit (loss)

Research and development expenses

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Equity accounted losses

and Three Months Ended June 30, 2023 Compared to Six and Three Months Ended June 30, 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

six months ended June 30, 2023 amounted to $2,010,000 compared to $1,205,000 for the six months ended June 30, 2022.

for the three months ended June 30, 2023 amounted to $1,290,000 compared to $801,000 for the three months ended June 30, 2022.

increase in the six months ended June 30, 2023 from the corresponding period is primarily attributable to (i) revenue generated from

Orgad that was consolidated for the full six months in 2023 as opposed to just two months in the corresponding period in 2022, and

(ii) revenue generated from Naiz Fit that was acquired in October 2022.

The increase in the three months ended June 30, 2023 from

the corresponding period is primarily attributable to an increase in Orgad sales and revenue generated from Naiz Fit.

cost of revenues expenses for the six months ended June 30, 2023 amounted to $1,918,000 compared to $730,000 for the six months

ended June 30, 2022.

and Three Months Ended September 30, 2023 Compared to Nine and Three Months Ended September 30, 2022

revenues for the nine months ended September 30, 2023 amounted to $4,166,000 compared to $1,931,000 for the nine months ended September

revenues for the three months ended September 30, 2023 amounted to $2,156,000 compared to $726,000 for the three months ended September

The increase in the nine months ended September 30, 2023 from the corresponding period is primarily attributable to (i) revenue

generated from Orgad that was consolidated for the full nine months in 2023 as opposed to just eight months in the corresponding period

in 2022, and (ii) revenue generated from Naiz Fit that was acquired in October 2022.

The increase in the three months ended September

30, 2023 from the corresponding period is primarily attributable to an increase in Orgad sales and revenue generated from Naiz Fit.

cost of revenues expenses for the nine months ended September 30, 2023 amounted to $2,698,000 compared to $1,607,000 for the nine months

ended September 30, 2022.

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 Orgad’s warehouse during January 2023 and an increase in revenues as described

cost of revenues expenses for the three months ended June 30, 2023 amounted

to $771,000 compared to $479,000 for the three months ended June 30, 2022.

The increase in comparison with the corresponding period was

mainly due an increase in revenues as described above.

due to the fire that occurred in Orgad’s warehouse during January 2023 and an increase in revenues as described above.

cost of revenues expenses for the three months ended September 30, 2023 amounted to $780,000 compared to $877,000 for the three months

ended September 30, 2022.

The increase in comparison with the corresponding period was mainly due an increase in revenues as described

and Development Expenses

research and development expenses for the six months ended June 30, 2023 amounted to $569,000 compared to $802,000 for the six

months ended June 30, 2022.

research and development expenses for the nine months ended September 30, 2023 amounted to $811,000 compared to $1,152,000 for the nine

months ended September 30, 2022.

The decrease from the corresponding period was mainly due to a decrease in salaries expenses due to

reduced headcount and a decrease in subcontractor expenses.

research and development expenses for the three months ended June 30, 2023 amounted to $227,000 compared to $390,000 for the three

months ended June 30, 2022.

research and development expenses for the three months ended September 30, 2023 amounted to $242,000 compared to $350,000 for the three

months ended September 30, 2022.

The decrease from the corresponding period was mainly due to a decrease in salaries expenses due to

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and Marketing Expenses

sales and marketing expenses for the six months ended June 30, 2023 amounted to $1,646,000 compared to $1,854,000 for the six months

ended June 30, 2022.

The decrease primarily resulted from a decrease in salary expenses due to reduced headcount, consultant

expenses, travel and marketing expenses offset by an increase in Amazon fees.

sales and marketing expenses for the three months ended June 30, 2023 amounted to $967,000 compared to $895,000 for the three months

ended June 30, 2022.

The increase primarily resulted from an increase in Amazon fees due to the increase in sales offset by a

decrease in salary expenses due to reduced headcount, consultant expenses, travel and marketing expenses.

sales and marketing expenses for the nine months ended September 30, 2023 amounted to $2,598,000 compared to $2,526,000 for the nine

months ended September 30, 2022.

The increase primarily resulted from an increase in Amazon fees due to the increase in sales offset

by a decrease in salary expenses due to reduced headcount, consultant expenses, travel and marketing expenses.

sales and marketing expenses for the three months ended September 30, 2023 amounted to $952,000 compared to $672,000 for the three

months ended September 30, 2022.

The increase primarily resulted from an increase in Amazon fees due to the increase in sales offset

by a decrease in salary expenses due to reduced headcount, consultant expenses, travel and marketing expenses.

and Administrative Expenses

general and administrative expenses for the six months ended June 30, 2023 amounted to $1,923,000 compared to $1,576,000 for the six months

ended June 30, 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.

general and administrative expenses for the three months ended June 30, 2023 amounted to $879,000 compared to $689,000 for the three

months ended June 30, 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.

a result of the foregoing, for the six months ended June 30, 2023, our operating loss was $4,046,000, an increase of $289,000 or 7.7%,

compared to our operating loss for the six months ended June 30, 2022 of $3,757,000.

a result of the foregoing, for the three months ended June 30, 2023, our operating loss was $1,554,000 a decrease of $98,000 or 6.0%,

compared to our operating loss for the three months ended June 30, 2022 of $1,652,000.

general and administrative expenses for the nine months ended September 30, 2023 amounted to $3,210,000 compared to $2,378,000 for the

nine months ended September 30, 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.

general and administrative expenses for the three months ended September 30, 2023 amounted to $1,287,000 compared to $802,000 for the

three months ended September 30, 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 nine months ended September 30,

2023, our operating loss was $5,151,000, a decrease of $581,000 or 10.1%, compared to our operating loss for the nine months ended September

30, 2022 of $5,732,000.

As a result of the foregoing, for the three months ended September

30, 2023, our operating loss was $1,105,000 a decrease of $870,000 or 44%, compared to our operating loss for the three months ended September

30, 2022 of $1,975,000.

Income (Expenses), Net

financial expense, net for the six months ended June 30, 2023, amounted to $100,000 compared to financial expense of $147,000 for the

six months ended June 30, 2022.

The increase compared to the corresponding period was mainly due to an increase in financial expenses

exchange rate differences.

financial income, net for the three months ended June 30, 2023, amounted to $46,000 as opposed to financial expense of $64,000 for the

three months ended June 30, 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 six months ended June 30, 2023, was $3,945,000, compared to net loss of $3,904,000

for the six months ended June 30, 2022.

a result of the foregoing, our net loss for the three months ended June 30, 2023 was $1,291,000, compared to net loss of $1,716,000 for

the three months ended June 30, 2022.

financial expenses, net for the nine months ended September 30, 2023, amounted to $78,000 compared to financial expense of $198,000 for

the nine months ended September 30, 2022.

The increase compared to the corresponding period was mainly due to an increase in financial

expenses exchange rate differences.

financial income, net for the three months ended September 30, 2023, amounted to $22,000 as opposed to financial expense of $51,000 for

the three months ended September 30, 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 nine months ended September 30, 2023, was $5,077,000, compared to net loss of $5,930,000

for the nine months ended September 30, 2022.

a result of the foregoing, our net loss for the three months ended September 30, 2023 was $1,132,000, compared to net loss of $2,026,000

for the three months ended September 30, 2022.

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

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and in the U.S.

of June 30, 2023, we had cash, cash equivalents, and restricted cash of $1,250,000 compared to $2,363,000 of cash, cash equivalents

of September 30, 2023, we had cash, cash equivalents, and restricted cash of $3,767,000 compared to $2,363,000 of cash, cash equivalents

and restricted cash as of December 31, 2022.

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

Naiz Fit, and resources that were deployed to grow both businesses offset by the public and private offerings that we completed in January

used in operating activities amounted to $3,640,000 for the six months

ended June 30, 2023, compared to $4,070,000 for the six months ended June 30, 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.

There was no net cash used in investing activities compared to cash used

in investing activities of $325,000 for the six months ended June 30, 2022.

cash provided by financing activities was $2,596,000 for the six months ended June 30, 2023, as opposed to net cash used in financing

activities of $24,000 for the six months ended June 30, 2022.

The cash flow from financing activities for the six months ended June 30,

2023, resulted from the public and private offering that occurred in January 2023.

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

in January 2023 and the offering that was completed in August 2023 offset by our operating activities, the acquisition of Orgad and Naiz

Fit, and resources that were deployed to grow both businesses.

used in operating activities amounted to $4,910,000 for the nine months ended September 30, 2023, compared to $5,858,000 for the nine

months ended September 30, 2022.

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

account receivables and a decrease in the net loss offset by an increase in inventory and the net loss.

was no net cash used in investing activities compared to cash used in investing activities of $327,000 for the nine months ended September

cash provided by financing activities was $6,230,000 for the nine months ended September 30, 2023, as opposed to net cash used in financing

activities of $39,000 for the nine months ended September 30, 2022.

The cash flow from financing activities for the nine months ended

September 30, 2023, resulted from the public and private offerings that occurred in January and August 2023.

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 June 30, 2023, we believe our existing cash will not be sufficient to fund operations for a period

cash flows and cash balances as of September 30, 2023, we believe our existing cash will not be sufficient to fund operations for a period

of more than 12 months.

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Additional capital would be used to accomplish the following:

finance our current operating

pursue growth opportunities;

hire and retain qualified

management and key employees;

respond to competitive

comply with regulatory

requirements;

maintain compliance with

applicable laws.

our current operating expenses;

growth opportunities;

and retain qualified management and key employees;

to competitive pressures;

with regulatory requirements;

compliance with applicable laws.

conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available

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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