What changed in this filing

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Item 1A. Risk Factors

2024-04-01 compared with 2023-04-14 · 241 added, 316 removed, 901 unchanged (38% of the section changed)

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have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.

limited operating history makes it difficult to evaluate our business and prospects.

is difficult to forecast our future performance, which may cause our financial results to fluctuate unpredictably.

will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be

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which may make it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those

recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which

We acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which

may increase our capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject

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we are able to expand our operations, we may be unable to successfully manage our future growth.

Related to Our Operations in Israel and Russia

headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations

invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.

Related to Our Operations in Israel

headquarters and most of our operations are located in Israel, and therefore, political, economic and military conditions in Israel

may affect our operations and results.

Related to Our Common Stock

more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.

Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions

business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions

and adverse developments with respect to financial institutions and associated liquidity risk;

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have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.

realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an

accumulated deficit of $53.5 million as at December 31, 2022.

Because of the numerous risks and uncertainties associated with

the development and commercialization of our products and business, we are unable to predict the extent of any future losses or when

we will become profitable, if at all.

Expected future operating losses will have an adverse effect on our cash resources,

shareholders’ equity and working capital.

Our failure to become and remain profitable could depress the value of our stock and

impair our ability to raise capital, expand our business, maintain our development efforts, or continue our operations.

our value could also cause you to lose all or part of your investment in us.

limited operating history makes it difficult to evaluate our business and prospects.

have only been developing our measurement technology since 2014.

Since then, our operating history has been primarily limited to

research and development, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts.

it may be difficult to evaluate our business and prospects.

We have not yet demonstrated an ability to commercialize our products.

Consequently, any predictions about our future performance may not be accurate, and you may not be able to fully assess our ability

to complete development and/or commercialize our products, and any future products.

realized a net loss of approximately $6.4 million and $8.3 million for the years ended December 31, 2023 and 2022 and had an accumulated

deficit of $60 million as of December 31, 2023.

Because of the numerous risks and uncertainties associated with the development and commercialization

of our products and business, we are unable to predict the extent of any future losses or when we will become profitable, if at all.

Expected future operating losses will have an adverse effect on our cash resources, shareholders’ equity and working capital.

failure to become and remain profitable could depress the value of our stock and impair our ability to raise capital, expand our business,

maintain our development efforts, or continue our operations.

A decline in our value could also cause you to lose all or part of your

investment in us.

is difficult to forecast our future performance, which may cause our financial results to fluctuate unpredictably.

have been developing measurement technology since 2014.

Since then, our operating history has been primarily limited to research and

development, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts.

Because we do not yet

have an established commercial operating history, and because the market for our products may rapidly evolve, it is hard for us to

predict our future performance.

Therefore, it may be difficult to evaluate our business and prospects.

We have not yet demonstrated

an ability to profitably commercialize our products.

Consequently, any predictions about our future performance may not be accurate,

and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future

will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly

dilutive and may cause the market price of our common stock to decline.

on our projected cash flows and the cash balances as of the date of this

Annual Report on Form 10-K, our existing cash is insufficient 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.

In order to meet our business objectives in the future, 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:

on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10-K, our existing cash is insufficient

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

In order to meet our business objectives in the future, 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:

our current operating expenses;

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Related to Our Company and Our Business

market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S.

retailers and

online third-party resellers adopting our flagship product, MySizeID.

market for our measurement technology is new and unproven, may experience limited growth.

market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties.

that our future success will depend in large part on market adoption of our flagship product, MySizeID , by U.S.

retailers and

that our future success will depend in large part on market adoption of Naiz Fit and

online third-party resellers.

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would have an adverse impact on our operating results and could cause our stock price to decline.

recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may

We acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may

increase our capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to

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synergistic to our product offering.

For example, we recently acquired Orgad which operates an omnichannel e-commerce platform and Naiz

which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.

We evaluate from time to time

various acquisitions and collaborations, including licensing or acquiring complementary technologies, intellectual property rights, or

The process for acquiring a company may take from several months up to a year and costs can vary greatly.

We may also compete

with others to acquire companies, and such competition may result in decreased availability of, or an increase in price for, suitable

acquisition candidates.

In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial

to the implementation of our strategy for other commercial or economic reasons.

As a result, it may be more difficult for us to identify

suitable acquisition or investment targets or to consummate acquisitions or investments on acceptable terms or at all.

If we are not

able to execute on any acquisition, we may not be able to achieve a future growth strategy and may lose market share.

addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential

risks, including:

For example, during 2022, we acquired Orgad, which operates an omnichannel e-commerce

platform, and Naiz Fit, which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.

evaluate from time to time various acquisitions and collaborations, including licensing or acquiring technologies,

intellectual property rights, or businesses.

The process for acquiring a company may take from several months up to a year and costs

can vary greatly.

We may also compete with others to acquire companies, and such competition may result in decreased availability

of, or an increase in price for, suitable acquisition candidates.

In addition, we may not be able to consummate acquisitions or

investments that we have identified as crucial to the implementation of our strategy for other commercial or economic reasons.

result, it may be more difficult for us to identify suitable acquisition or investment targets or to consummate acquisitions or

investments on acceptable terms or at all.

If we are not able to execute on any acquisition, we may not be able to achieve a future

growth strategy and may lose market share.

addition, the acquisition of Orgad, Naiz Fit and any potential future acquisition, joint venture or collaboration may entail

numerous potential risks, including:

operating expenses and cash requirements;

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For example, in partial consideration for the acquisition of Orgad,

we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued

240,000 shares of our common stock.

Furthermore, if we undertake acquisitions, we may incur large one-time expenses and acquire

intangible assets that could result in significant future amortization expense.

we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of our common stock.

Furthermore, if we undertake acquisitions, we may incur large one-time expenses and acquire intangible assets that could result in significant

future amortization expense.

we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations

and financial condition may be adversely affected.

believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly

retailers, is critical to achieving widespread acceptance of our products.

Our ability to successfully develop new retailers

may be adversely affected by a lack of awareness or acceptance of our brand.

To the extent that we are unable to foster name recognition

and affinity for our brand, our growth may be significantly delayed or impaired.

The successful promotion of our brand will depend largely

on our continued marketing efforts, market adoption of our products, and our ability to successfully differentiate our products from

believe that enhancing the “Naiz Fit” brand identity and increasing market awareness of our company and products, is

critical to achieving widespread acceptance of our products.

Our ability to successfully develop new retailers may be adversely

affected by a lack of awareness or acceptance of our brand.

To the extent that we are unable to foster name recognition and affinity

for our brand, our growth may be significantly delayed or impaired.

The successful promotion of our brand will depend largely on our

continued marketing efforts, market adoption of our products, and our ability to successfully differentiate our products from

competing products and services.

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consumer affinity for our brand could significantly reduce our brand value and damage our business.

If consumers perceive or experience

a reduction in quality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and

our business may be adversely affected.

If consumers perceive or

experience a reduction in quality, or in any way believe we fail to deliver a consistently positive experience, our brand value

could suffer and our business may be adversely affected.

particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures,

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rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.

currently utilize, and plan on continuing to utilize over the current fiscal year, third-party networking providers and distribution

through companies including, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra

to distribute our technologies.

If disruptions or capacity constraints occur, we may have no means of replacing these services, on a

timely basis or at all.

We currently utilize, and plan on continuing to utilize over the current fiscal year, third-party networking providers

and distribution through companies including, but not limited to, Magento, SalesForce, WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix

and Wix to distribute our technologies.

If disruptions or capacity constraints occur, we may have no means of replacing these services,

on a timely basis or at all.

This could cause a material adverse condition for our operations and financial earnings.

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our business.

ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service

marks and other proprietary intellectual property, including our names and logos.

We currently have no registered trademarks.

plan to register a number of our trademarks;

however, no assurance can be given that our trademark applications will be approved.

of December 31, 2022, we own 18 issued patents:

six in Europe, four in the U.S., three in each of Russia and Japan and one in each of

Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process.

As of such date, we do not have any registered trademarks., No assurance can be given that our patent applications which are in process

ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks,

service marks and other proprietary intellectual property, including our names and logos.

We currently have no registered

While we plan to register a number of our trademarks;

however, no assurance can be given that our trademark applications

will be approved.

If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.

As of December 31, 2023, we own 16 issued patents:

six in Europe, four in the U.S., three in Japan, two in Canada

and one in Israel which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in

As of such date, we do not have any registered trademarks., No assurance can be given that our patent applications which

are in process will be approved.

If our patent applications are not approved, our ability to expand or develop our business may be

negatively affected.

parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents.

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and generating revenue.

face significant competition in every aspect of our business.

Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit,

Smart Measure and 3DLook.

We face significant competition in every aspect of our business.

Our competitors include True Fit, Virtusize, EasyMeasure,

AR MeasureKit, Smart Measure andFit Analytics and 3DLook.

These companies may already have an established market in our industry.

Most of these companies have significantly

greater financial and other resources than us and have been developing their products and services longer than we have been developing

of these companies have significantly greater financial and other resources than us and have been developing their products and services

longer than we have been developing ours.

addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other

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example, on 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 the fire.

We shifted Orgad’s operation to its headquarters.

of the inventory that was in the warehouse was approximately $450,000.

We believe that this incident did not affect the future sales results

of Orgad for the year of 2023.

The inventory was not insured and it is too early to determine the potential impact of this incident on

the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).

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.

business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the

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to meet regulatory requirements or investor, customer, consumer, employee or other shareholders’ evolving expectations and standards

for responsible corporate citizenship in areas including environmental stewardship, support for local communities, Board of Director and

employee diversity, human capital management, employee health and safety practices, product quality, supply chain management, corporate

for responsible corporate citizenship in areas including environmental stewardship, support for local communities, Board of Director

and employee diversity, human capital management, employee health and safety practices, product quality, supply chain management, corporate

governance and transparency, our reputation, brand and employee retention may be negatively impacted, and our customers and suppliers

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operating or product development costs.

do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide

significantly expanded climate-related disclosures in their periodic reporting, which may require us to incur significant additional costs

to comply and impose increased oversight obligations on our management and board of directors, or fail to meet evolving investor, industry

or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their capital investment in our company, we may

become subject to penalties, and customers and consumers may choose to stop purchasing our products, if approved for commercialization,

we do not adapt to or comply with new regulations, including the SEC’s recently adopted rules that would require companies to

provide expanded climate-related disclosures in their periodic reporting, which may require us to incur significant additional

costs to comply and impose increased oversight obligations on our management and board of directors, or fail to meet evolving investor,

industry or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their capital investment in our company,

we may become subject to penalties, and customers and consumers may choose to stop purchasing our products, if approved for commercialization,

which could have a material adverse effect on our reputation, business or financial condition.

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and adverse developments with respect to financial institutions and associated liquidity risk.

depends on the economic health of the global economies.

If the conditions in the global economies remain uncertain or continue to be volatile,

or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism

or other geopolitical events, our business, operating results and financial condition may be materially adversely affected.

Economic weakness,

inflation and increases in interest rates, limited availability of credit, liquidity shortages and constrained capital spending have at

times in the past resulted, and may in the future result, in challenging and delayed sales cycles, slower adoption of new technologies

and increased price competition, and could negatively affect our ability to forecast future periods, which could result in an inability

to satisfy demand for our products and a loss of market share.

increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our

business, and failure to secure these on reasonable terms may adversely impact our financial condition.

Additionally, increases in inflation,

along with the uncertainties surrounding COVID-19, geopolitical developments and global supply chain disruptions, have caused, and may

in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult,

costly or dilutive for us to secure additional financing.

A failure to adequately respond to these risks could have a material adverse

impact on our financial condition, results of operations or cash flows.

recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bank-specific and broader

financial institution liquidity risk and concerns.

Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released

a statement that depositors at SVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance

limits, under a systemic risk exception, future adverse developments with respect to specific financial institutions or the broader financial

services industry may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs,

and create additional market and economic uncertainty.

There can be no assurance that future credit and financial market instability and

a deterioration in confidence in economic conditions will not occur.

Our general business strategy may be adversely affected by any such

economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions.

current equity and credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term

liquidity risk and also make any necessary debt or equity financing more difficult, more costly, more onerous with respect to financial

and operating covenants and more dilutive.

Failure to secure any necessary financing in a timely manner and on favorable terms could have

a material adverse effect on our growth strategy, financial performance and stock price and could require us to alter our operating plans.

In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers, suppliers and other partners

may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule and

business may be adversely affected by the impact of any renewed outbreak of the COVID-19 pandemic.

business depends on the economic health of the global economies.

If the conditions in the global economies remain uncertain or continue

to be volatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and

Ukraine, terrorism or other geopolitical events, our business, operating results and financial condition may be materially adversely

Economic weakness, inflation and increases in interest rates, limited availability of credit, liquidity shortages and constrained

capital spending have at times in the past resulted, and may in the future result, in challenging and delayed sales cycles, slower adoption

of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, which could

result in an inability to satisfy demand for our products and a loss of market share.

addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and

operate our business, and failure to secure these on reasonable terms may adversely impact our financial condition.

Additionally, increases

in inflation, along with the uncertainties surrounding a resurgence of COVID-19, geopolitical developments and global supply chain disruptions,

have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may

make it more difficult, costly or dilutive for us to secure additional financing.

A failure to adequately respond to these risks could

have a material adverse impact on our financial condition, results of operations or cash flows.

can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will

Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business

environment or continued unpredictable and unstable market conditions.

If the current equity and credit markets deteriorate, or if adverse

developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity

financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive.

Failure to secure

any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial

performance and stock price and could require us to alter our operating plans.

In addition, there is a risk that one or more of our service

providers, financial institutions, manufacturers, suppliers and other partners may be adversely affected by the foregoing risks, which

could directly affect our ability to attain our operating goals on schedule and on budget.

business may be adversely affected by the impact of any resurgence of the COVID-19 pandemic.

health epidemics or outbreaks could adversely impact our business.

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funds, and accordingly, the impact of COVID-19 could have an adverse impact on our business and our financial results.

Related to Our Operations in Russia

invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.

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 and we engage two software developers through a third party who are

based in Ukraine.

On February 24, 2022, Russia invaded Ukraine.

The outbreak of hostilities between the two countries could result in

more widespread conflict and could have a severe adverse effect on the region.

Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European

Union, issued broad-ranging economic sanctions against Russia.

Such sanctions included, among other things, a prohibition on doing business

with certain Russian companies, officials and oligarchs;

a commitment by certain countries and the European Union to remove selected

Russian banks from the Society for Worldwide Interbank Financial Telecommunications (SWIFT) electronic banking network that connects

banks globally;

and restrictive measures to prevent the Russian Central Bank from undermining the impact of the sanctions.

to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securities by foreigners.

Russia may take

additional counter measures or retaliatory actions in the future.

While diplomatic efforts have been ongoing, the conflict between Russia

and Ukraine is currently unpredictable and has the potential to result in broadened military actions.

The duration of ongoing hostilities

and such sanctions and related events cannot be predicted.

Uncertainty as to future relations between Russia and the U.S.

and other countries

in the west, or between Russia and other eastern European countries, may have a negative impact on our operations.

international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia,

may in the future significantly affect our ability to conduct our activities in Russia including paying our personnel.

date, the conflict has had minimal impact on operations .

Nevertheless, we have no way to predict the progress or outcome of the situation

in Ukraine, as the conflict and governmental reactions are rapidly developing and beyond our control.

Prolonged unrest, intensified military

activities or more extensive sanctions impacting the region could have a material adverse effect on our operations, results of operations,

financial condition, liquidity and business outlook.

military conditions or other risks in Russia could adversely affect our business.

is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental

powers for the Russian Government, some for the subjects and some for areas of joint competence.

In addition, eight “federal districts”

(“federal’nye okruga”), which are overseen by a plenipotentiary representative of the President, supplement the country’s

federal system.

The delineation of authority among and within the subjects is, in many instances, unclear and contested, particularly

with respect to the division of tax revenues and authority over regulatory matters.

For these reasons, the Russian political system is

vulnerable to tension and conflict between federal, subject and local authorities.

This tension creates uncertainties in the operating

environment in Russia, which may prevent us from carrying out our strategy effectively.

The risks associated with these events or potential

events could materially and adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia,

and our business, prospects, financial condition, hiring ability, and results of operations could be materially and adversely affected.

high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations

by government agencies.

Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims

that the we are involved in such corruption or illegal activities could generate negative publicity, of which could harm our development,

financial condition, results of operations or prospects.

and other risks in Russia could adversely affect our business.

a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.

the last two decades, the Russian economy has experienced or continues to experience at various times:

volatility in its GDP;

impact of international sanctions;

levels of inflation;

in, or high, interest rates;

price declines in oil and other natural resources;

in the local currency market;

continued operation of loss-making enterprises due to the lack of effective bankruptcy proceedings;

increases in poverty rates, unemployment and underemployment.

Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial

crisis, and, as an emerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global

Any further deterioration in the general economic conditions in Russia (whether or not as a result of the events mentioned above)

could have a material adverse effect on the Russian economy and may result in hiring and operational difficulties, as well as potential

flight of human capital, which could have a material adverse effect on our business, product development and results of operations.

risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.

the risks of the Russian legal system are:

inconsistencies among laws, presidential decrees, and government and ministerial orders and

conflicting local, regional and federal laws and regulations;

the untested nature of the independence of the judiciary and

its sensitivity to economic or political influences;

substantial gaps in the regulatory structure due to the delay or absence of implementing

a high degree of discretion on the part of governmental authorities;

reported corruption within governmental entities and

other governmental authorities;

the relative inexperience of judges and courts in interpreting laws applicable to complex transactions;

and the unpredictability of enforcement of foreign judgments and foreign arbitral awards.

Many Russian laws and regulations are construed

in a way that provides for significant administrative discretion in application and enforcement.

Unlawful, selective or arbitrary actions

of the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions,

and civil claims.

Any of the above events may have a material adverse effect on our product development and results of operations.

certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject

to frequent change, varying interpretations, and inconsistent and selective enforcement.

There are currently no clear rules for distinguishing

between lawful tax optimization and tax evasion.

In addition, Russian tax laws do not contain detailed rules on the taxation in Russia

of foreign companies.

As such, taxpayers often have to resort to court proceedings to defend their position against the Russian tax authorities.

However, in the absence of consistent court practice or binding precedents, there is inconsistency amongst court decisions.

the possibility exists that the Russian Federation would impose arbitrary or onerous taxes and penalties in the future, which could have

a material adverse effect on our product development and results of operations.

Related to Our Operations In Israel

headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations

headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of

headquarters and some of our operations are located in Israel, and therefore, political, economic and military conditions in Israel may

affect our operations and results.

headquarters and some of our operations are located in central Israel and our key employees, officers and directors are residents of

Accordingly, political, economic and military conditions in Israel and the surrounding region may directly affect our business

Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its Arab neighbors.

Any hostilities involving Israel or the interruption or curtailment of trade within Israel or between Israel and its trading partners

could adversely affect our operations and results of operations and could make it more difficult for us to raise capital.

winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political

party operating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese

Islamist Shiite militia group and political party.

Israel faces political tension with respect to its relationships with Turkey, Iran

and certain Arab neighbor countries.

In addition, recent conflicts involved missile strikes against civilian targets in various parts

of Israel, and negatively affected business conditions in Israel.

Recent political uprisings and social unrest in various countries in

the Middle East and North Africa are affecting the political stability of those countries.

This instability may lead to deterioration

of the political relationships that exist between Israel and these countries, and have raised concerns regarding security in the region

and the potential for armed conflict.

and operations.

Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and

its Arab neighbors.

Any hostilities involving Israel or the interruption or curtailment of trade within Israel or between Israel and

its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raise

particular, in 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 these terrorist organizations in parallel continued

rocket and terror attacks.

As a result of the events of October 7, 2023, the Israeli government declared that the country was at war

and the Israeli military began to call-up reservists for active duty.

None of our full-time or part-time employees in Israel were called

up for reserve service.

Military service call ups that result in absences of personnel from us for an extended period of time may materially

and adversely affect our business, prospects, financial condition and results of operations.

the war broke out on October 7, 2023, our operations have not been adversely affected by this situation, and we have not experienced

disruptions to our business operations.

In particular, most of our operations are in Spain.

However, the intensity and duration of Israel’s

current war against Hamas is difficult to predict at this stage, as are such war’s economic implications on our business and operations

and on Israel’s economy in general.

If the war extends for a long period of time or expands to other fronts, such as Lebanon, Syria

and the West Bank, our operations may be adversely affected.

addition, since the commencement of these events, there have been continued hostilities along Israel’s northern border with Lebanon

(with the Hezbollah terror organization) and southern border (with the Houthi movement in Yemen).

It is possible that hostilities with

Hezbollah in Lebanon will escalate, and that other terrorist organizations, including Palestinian military organizations in the West

Bank as well as other hostile countries, such as Iran, will join the hostilities.

Such clashes may escalate in the future into a greater

regional conflict.

In addition, Iran has threatened to attack Israel and is widely believed to be developing nuclear weapons.

also believed to have a strong influence among extremist groups in the region, such as Hamas in Gaza, Hezbollah in Lebanon, the Houthi

movement in Yemen and various rebel militia groups in Syria.

These situations may potentially escalate in the future to more violent

events which may affect Israel and us.

Any armed conflicts, terrorist activities or political instability in the region could adversely

affect business conditions and could harm our results of operations.

For example, any major escalation in hostilities in the region could

result in a portion of our employees and service providers being called up to perform military duty for an extended period of time.

with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing us to make

alternative arrangements when necessary.

In addition, the political and security situation in Israel may result in parties with whom

we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements

pursuant to force majeure provisions in such agreements.

Any future deterioration in the political and security situation in Israel will

negatively impact our business.

affect business conditions, could harm our results of operations and could make it more difficult for us to raise capital.

whom we do business may decline to travel to Israel during periods of heightened unrest or tension, forcing us to make alternative arrangements

when necessary in order to meet our business partners face to face.

In addition, the political and security situation in Israel may result

in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments

under those agreements pursuant to force majeure provisions in such agreements.

Further, in the past, the State of Israel and Israeli

companies have been subjected to economic boycotts.

Several countries still restrict business with the State of Israel and with Israeli

These restrictive laws and policies may have an adverse impact on our operating results, financial condition or the expansion

of our business.

Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners

could adversely affect our operations and results of operations.

In recent years, the hostilities involved missile strikes against civilian

targets in various parts of Israel, including areas in which our employees and some of our consultants are located, and negatively affected

business conditions in Israel.

commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle

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business conditions and could harm our results of operations.

in the past, the State of Israel and Israeli companies have been subjected to an economic boycott.

Several countries still restrict business

with the State of Israel and with Israeli companies.

These restrictive laws and policies may have an adverse impact on our operating

results, financial condition or the expansion of our business.

legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting

under a system of proportional representation.

Israel’s most recent general elections were held on April 9, 2019, September 17,

2019, March 2, 2020 and November 1, 2022.

The uncertainty surrounding the results of the recent elections may continue.

Actual or perceived

political instability in Israel or any negative changes in the political environment, may individually or in the aggregate adversely

affect the Israeli economy and, in turn, our business, financial condition, results of operations and prospects.

The continued political instability and hostilities between Israel and its neighbors and any future armed conflict,

terrorist activity or political instability in the region could adversely affect our operations in Israel and adversely affect the market

price of our shares of common stock.

In addition, several organizations and countries may restrict doing business with Israel and Israeli

companies have been and are today subjected to economic boycotts.

The interruption or curtailment of trade between Israel and its present

trading partners could adversely affect our business, financial condition and results of operations.

Finally, political conditions within Israel may affect our operations.

Israel has held five general elections between

2019 and 2022, and prior to October 2023, the Israeli government pursued extensive changes to Israel’s judicial system, which sparked

extensive political debate and unrest.

To date, these initiatives have been substantially put on hold.

Actual or perceived political instability

in Israel or any negative changes in the political environment, may individually or in the aggregate adversely affect the Israeli economy

and, in turn, our business, financial condition, results of operations and growth prospects.

of our employees are obligated to perform military reserve duty in Israel.

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of compliance with local laws, including labor laws and intellectual property laws;

with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;

with domestic and foreign government policies;

in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;

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of legislative or regulatory changes;

disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars,

terrorism, political unrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies

(or concerns over the possibility of such an emergency, including for example, the recent the COVID-19 pandemic), boycotts, adoption

or expansion of government trade restrictions, and other business restrictions.

disasters (including for example, the fire in the Orgad warehouse in January 2023) and political and economic instability, including

wars, terrorism, political unrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies

(or concerns over the possibility of such an emergency, including for example, the recent resurgence of the COVID-19 pandemic), boycotts,

adoption or expansion of government trade restrictions, and other business restrictions.

stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices

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these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and price that we deem

securities are traded on more than one market which may result in price variations .

securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005.

Trading in our securities

on such exchanges occurs in different currencies (U.S.

dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times

(due to different time zones, trading days and public holidays in the United States and Israel).

The trading prices of our securities

on the two exchanges may differ due to the foregoing and other factors.

Any decrease in the price of our shares on the TASE could cause

a decrease in the trading price of our shares on the Nasdaq Capital Market and vice versa.

are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies,

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would result in dilution of shareholders’ interests in the company and could depress our stock price.

Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding

as of March 31, 2023 and our board of directors is authorized to issue additional shares of our common stock.

our board of directors intends to utilize its reasonable business judgment to fulfil its fiduciary obligations to our then existing

stockholders in connection with any future issuance of our capital stock, the future issuance of additional shares of our capital

stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a material

effect on the market value of the shares.

Further, other than certain participation rights that we have granted in a past offering,

our shares do not have preemptive rights, which means we can sell shares of our capital stock to other persons without offering

purchasers in this offering the right to purchase their proportionate share of such offered shares.

Therefore, any additional sales

of stock by us could dilute your ownership interest in our Company.

Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 5,091,668 are currently outstanding as

of March 10, 2024 and our board of directors is authorized to issue additional shares of our common stock.

Although our board of directors

intends to utilize its reasonable business judgment to fulfil its fiduciary obligations to our then existing stockholders in connection

with any future issuance of our capital stock, the future issuance of additional shares of our capital stock could cause immediate, and

potentially substantial, dilution to our existing stockholders, which could also have a material effect on the market value of the shares.

Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptive rights, which

means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their

proportionate share of such offered shares.

Therefore, any additional sales of stock by us could dilute your ownership interest in our

quarterly operating results may fluctuate significantly .

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has established certain standards for the continued listing of a security on the Nasdaq Capital Market.

The standards for continued

listing include, among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a

period of 30 consecutive trading days and that we maintain a minimum of $2,500,000 in shareholders’ equity.

We have in the

past fallen below the minimum bid price and minimum shareholders’ equity.

assurance can be given that we will continue to be in compliance with the Rule.

The standards for continued listing

include, among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive

trading days and that we maintain a minimum of $2,500,000 in shareholders’ equity.

November 3, 2023, we were notified, or the Notification Letter, by the Nasdaq Listing Qualifications that we are not in compliance with

the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2), or the Rule, for continued listing on The Nasdaq Capital

Notification Letter provides that the Company has 180 calendar days, or until May 1, 2024, to regain compliance with the Rule.

compliance, the bid price of our common stock must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive

business days.

In the event we do not regain compliance by May 1, 2024, we may then be eligible for additional 180 days if we meet the

continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital

Market, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency

during the second compliance period.

If we do not qualify for the second compliance period or fail to regain compliance during the second

compliance period, then Nasdaq will notify us of its determination to delist our common stock, at which point we will have an opportunity

to appeal the delisting determination to a Hearings Panel.

assurance can be given that we will be able to regain compliance with the Rule.

Failure to meet applicable Nasdaq continued listing standards

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stockholders.

of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659

shares of our common stock, which warrants and options are exercisable for prices ranging between $2.81 and $375.

The expiration of

the term of such options and warrants range from 0.22 years to 4.83 years.

If a significant number of such warrants and stock

options are exercised by the holders, the percentage of our common stock owned by our existing stockholders will be diluted.

of March 9, 2024, we had outstanding warrants to acquire 6,044,294 shares of our common stock and stock options to purchase 257,144 shares

of our common stock, which warrants and options are exercisable for prices ranging between $0.48 and $42.25.

The expiration of the term

of such options and warrants range from 0.50 years to 4.98 years.

If a significant number of such warrants and stock options are exercised

by the holders, the percentage of our common stock owned by our existing stockholders will be diluted.

our common stock to become subject to the penny stock rules then this could result in U.S.

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which could cause the value of our securities, if any, to decline in value or become worthless.

UNRESOLVED STAFF COMMENTS

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-K

Item 1A. Risk Factors