What changed in this filing

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Item 1. Financial Statements

2024-05-15 compared with 2023-11-14 · 367 added, 433 removed, 133 unchanged (86% of the section changed)

1 unchanged sentence

and Subsidiaries

of September 30, 2023

of March 31, 2024

Dollars in Thousands

AND ITS SUBSIDIARIES

Consolidated Interim Financial Statements as of September 30, 2023 (Unaudited)

Condensed Consolidated Interim Balance Sheets (Unaudited)

Condensed Consolidated Interim Statements of Comprehensive Loss (Unaudited)

Condensed Consolidated Interim Statements of Changes in Stockholders’ Equity (Unaudited)

Condensed Consolidated Interim Statements of Cash flows (Unaudited)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

Consolidated Interim Financial Statements as of March 31, 2024 (Unaudited)

Consolidated Interim Balance Sheets (Unaudited)

Consolidated Interim Statements of Comprehensive Loss (Unaudited)

Consolidated Interim Statements of Changes in Stockholders’ Equity (Unaudited)

Consolidated Interim Statements of Cash flows (Unaudited)

to Condensed Consolidated Interim Financial Statements (Unaudited)

AND ITS SUBSIDIARIES

1 unchanged sentence

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

September 30,

and cash equivalents

receivables and prepaid expenses

current assets

Cash and cash equivalents

Restricted cash

Account receivables

Other receivables and prepaid expenses

Total current assets

Long term deposits

Property and equipment, net

Operating right-of-use asset

Intangible assets

Investment in JV

Investment in marketable securities

Total non-current assets

Liabilities and stockholders’ equity

term deposits

and equipment, net

right-of-use asset

in marketable securities

non-current assets

and stockholders’ equity

lease liability

overdraft and short-term loans

to Related parties

current liabilities

Operating lease liability

Bank overdraft and short-term loans

Trade payables

Liabilities to Related parties

Other payables

Total current liabilities

Long-term loans

Deferred tax liabilities

Operating lease liability

Total non-current liabilities

Total liabilities

COMMITMENTS AND CONTINGENCIES

Stockholders’ equity:

Stock Capital -

Common stock of $ 0.001 par value - Authorized:

250,000,000 shares;

lease liability

non-current liabilities

AND CONTINGENCIES

Stockholders’

stock of $ 0.001 par

value - Authorized:

Issued and outstanding:

2,981,792 and 1,464,117 as of September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

641,459 ( * )

and 452,724 ( * )

as of March 31, 2024 and December 31, 2023, respectively

paid-in capital

other comprehensive loss

stockholders’ equity

liabilities and stockholders’ equity

to give retroactive effect of 1:8 Reverse stock split, see note 9 (a)

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

2 unchanged sentences

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

Nine-Months Ended

September 30,

Three-Months Ended

September 30,

Cost of revenues ( * )

Cost of revenues

( * )( 1,147 )

and development

and marketing

and administrative

operating expenses

Research and development

Sales and marketing

General and administrative

Total operating expenses

Operating loss

Financial income (expenses), net

Equity loss of equity method investees

Loss before taxes

Taxes on income

Other comprehensive income (loss):

Foreign currency translation differences

Total comprehensive loss

Basic and diluted loss per share**

Basic and diluted weighted average number of shares outstanding**

During the nine and three

month ended September 30, 2023, the Company recorded an inventory write-down of $ 643 and $ 0 due to the fire that occurred in its

warehouse (see Note 8(a))

Adjusted to give retroactive

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

income (expenses), net

loss of equity method investees ***

before income taxes

comprehensive loss:

currency translation differences

comprehensive loss

and diluted loss per share**

and diluted weighted average number of shares outstanding **

the three months ended March 31, 2023, the Company recorded an inventory write-down of $ 643

due to the fire that occurred in its warehouse).

to give retroactive effect of 1:8 reverse stock split , see note 9 (a).

March 2024, the Company closed the joint venture (“JV”) in Brazil with Santista Têxtil.

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

4 unchanged sentences

stockholders’

Balance as of January 1, 2023

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

Issuance of shares, net of issuance cost of $ 959 ( ** )

Issuance of shares, net of issuance cost

Exercise of warrants and prefunded warrants

Total comprehensive loss

Balance as of September 30, 2023

as of January 1, 2024

compensation related to options granted to employees and consultants

of shares in Business Combination

of warrants and prefunded warrants

comprehensive loss

as of March 31, 2024

an amount less than $1.

notes 8(b) and 8(e)

comprehensive

stockholders’

Balance as of January 1, 2022

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

Issuance of shares in Business Combination

Total comprehensive loss

Balance as of September 30, 2022

Represents an amount less than $1

Adjusted to give retroactive effect of 1:25 reverse

stock split, see Note 1(b)

comprehensive

to give retroactive effect of 1:8 reverse stock split , see note 9 (a).

other comprehensive

stockholders’

Balance as of July 1, 2023

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

Issuance of shares, net of issuance cost of $ 518 (**)

Issuance of shares, net of issuance cost

Exercise of prefunded warrants

Exercise of warrants and prefunded warrants

Total comprehensive loss

Balance as of September 30, 2023

Represents an amount less than $1

see notes 8(e)

comprehensive

as of January 1, 2023

compensation related to options granted to employees and consultants

of shares business combination

of shares, net of issuance cost of $ 341

of warrants and prefunded warrants

comprehensive loss

as of March 31, 2023

an amount less than $1.

to give retroactive effect of 1:8 reverse stock split , see note 9 (a).

other comprehensive

stockholders’

Balance as of July 1, 2022

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

Issuance of shares in Business Combination ( * )

Issuance of shares in Business Combination

Total comprehensive loss

Balance as of September 30, 2022

Represents an amount less than $1

as of December 31, 2022

compensation related to options and restricted shares granted to employees and consultants

of shares, net of issuance cost of $ 959

of shares, net of issuance cost

of Exercise of warrants and prefunded warrants

comprehensive loss

as of December 31, 2023

an amount less than $1.

to give retroactive effect of 1:8 reverse stock split , see note 9 (a).

AND ITS SUBSIDIARIES

1 unchanged sentence

dollars in thousands

Nine-Months Ended

September 30,

Cash flows from operating activities:

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

Change in operating lease right-of-use asset

Amortization of intangible assets

Change in warrants and derivatives

Change in liabilities to related parties

Interest of long-term liabilities

Interest paid

Revaluation of investment in marketable securities

Change in Investment in JV

Stock based compensation

Change in inventory

Change in deferred tax liabilities

Change in account receivables

Changes in operating lease liabilities

Change in other receivables and prepaid expenses

Change in trade payables

Change in account payables

Net cash used in operating activities

Cash flows from investing activities:

Acquisition of a subsidiary, net of cash acquired

Purchase of property and equipment

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of shares, net of issuance costs

Loans received

Repayment of loans

Net cash provided by (used in) financing activities

Effect of exchange rate fluctuations on cash and cash equivalents

Increase (decrease) in cash,

cash equivalents and restricted cash (*)

Cash, cash equivalents and restricted cash at the beginning of the period

Cash, cash equivalents and restricted cash at the end of the period

Non cash activities:

Shares issued in Acquisition of a subsidiary

$ 1,213 relates to change

in cash and cash equivalents and, $ 191 to change in restricted cash for the nine months ended September 30, 2023.

flows from operating activities:

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

in operating lease right-of-use asset

of intangible assets

in liabilities to related parties

of long-term liabilities

of investment in marketable securities

in Investment in JV

based compensation

in deferred tax liabilities

in account receivables

in operating lease liabilities

in other receivables and prepaid expenses

in trade payables

in other payables

cash used in operating activities

flows from investing activities:

from investment in JV

Proceeds from short-term deposits

cash provided by (used in) investing activities

flows from financing activities:

from issuance of shares, net of issuance costs

cash provided by (used in) financing activities

of exchange rate fluctuations on cash and cash equivalents

(decrease) in cash, cash equivalents and restricted cash (*)

cash equivalents and restricted cash at the beginning of the period

cash equivalents and restricted cash at the end of the period

cash activities:

in operating lease right-of-use asset and liability

relates to change in cash and cash equivalents and, $ ( 2 ) to change in restricted cash for the three months ended March 31, 2024.

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

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

is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel

e-commerce market to the courier services market and to the Do It Yourself smartphone and tablet apps market.

The technology is driven

by proprietary algorithms which are able to calculate and record measurements in a variety of novel ways.

addition to the measurement technologies, following the Orgad International Marketing Ltd.

(“Orgad”) acquisition as detailed

below, the Company operates an online retailer platform, has expertise in e-commerce, supply chain, and has technology operating

as a third-party seller on Amazon.com and other sites.

the acquisition of Naizfit Bespoke Technologies, S.L (“Naiz” or “Naiz Fit”) in October 2022, the Company

expanded its offering outreach and customer base.

Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all

of which are incorporated in Israel, My Size LLC which was incorporated in the Russian Federation, and Naiz Fit, a limited liability

company incorporated under the laws of Spain.

References to the Company include the subsidiaries unless the context indicates otherwise.

the nine-month period ended September 30, 2023, the Company has incurred significant losses and negative cash flows from operations

and has an accumulated deficit of $ 58,578 .

The Company has financed its operations mainly through fundraising from various investors.

Size, Inc (the “Company”).

is developing unique measurement technologies based on algorithms with applications

in a variety of areas, from the apparel e-commerce market, to the courier services market

and to the Do It Yourself (“DIY”) smartphone and tablet apps market.

The technology

is driven by proprietary algorithms, which are able to calculate and record measurements

in a variety of novel ways.

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

and customer base.

the acquisition of Orgad International Marketing Ltd.

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

e-commerce platform.

Company has six subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., Orgad and Rotrade

Ltd all of which are incorporated in Israel, My Size LLC which was incorporated in the Russian Federation and Naiz., a limited liability company incorporated under the laws of Spain.

References to the Company include the subsidiaries unless

the context indicates otherwise.

Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc.

(“Topspin”), a private

company registered in the State of Delaware.

In December 2013, the Company changed its name to Knowledgetree Ventures Inc.

Subsequently,

in February 2014, the Company changed its name to My Size, Inc.

Topspin was engaged, through its Israeli subsidiary, in research

and development in the field of cardiology and urology.

September 1, 2005 to March 27, 2024, the Company’s common stock were traded on the Tel Aviv Stock Exchange.

Since inception, the Company incurred significant losses

and negative cash flows from operations and had an accumulated deficit of $ 60,897 .

has financed its operations mainly through fundraising from various investors.

Company’s management expects that the Company 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, 2023, management is of the opinion

that its existing cash will be sufficient to fund operations for a period less than 12 months.

As a result, there is substantial

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

Based on the projected cash flows and cash balances as of March 31, 2024, management is of the opinion that

its existing cash will be sufficient to fund operations for a period less than 12 months.

As a result, there is substantial doubt

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

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

6 unchanged sentences

the Company fail to operate as a going concern.

December 7, 2022, the Company’s board of directors approved a 1-for-25 reverse stock split of the Company’s issued and

outstanding shares of common stock.

The reverse stock split became effective on December 8, 2022.

Exercise price and net loss per

share amounts were adjusted retroactively for all periods presented in these financial statements.

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.

April 15, 2024, the Company’s board of directors approved a 1-for-8

reverse stock split of the Company’s issued and outstanding shares of common stock.

The reverse stock split was effected on

April 19, 2024 with the Company’s shares beginning trading on a post-split basis on the Nasdaq Capital Market

(“Nasdaq”) on April 23, 2024.

The exercise prices of the Company’s outstanding warrants and net loss per share

amounts were adjusted retroactively for all periods presented in these financial statements.

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 other terrorist organizations in

parallel to their continued rocket and terror attacks.

The Company cannot currently predict the intensity or duration of Israel’s

war against Hamas, nor can predict how this war will ultimately affect the Company’s business and operations or Israel’s

economy in general.

The war with Hamas has had an immaterial effect on its

operations and financial results so far.

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.

In 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

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 will join the hostilities.

In addition, Iran recently

launched a direct attack on Israel involving hundreds of drones and missiles and has threatened to continue to attack Israel and is widely

believed to be developing nuclear weapons.

Iran is 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 and Iraq.

may escalate in the future into a greater regional conflict.

war with Hamas has had an immaterial effect on its operations and financial results so far.

This is attributable to its global footprint and the offices in Spain which has become a

hub for the Company’s sizing solutions business.

The majority of Orgad’s inventory utilizes fulfillment by Amazon rather than

fulfilling directly.

Inventory is now maintained and orders are shipped from regional Amazon warehouses, thereby reducing exposure

to inventory risk and contributing to operating efficiencies.

The majority of Orgad’s inventory

utilizes fulfillment by Amazon rather than fulfilling directly.

Inventory is now maintained

and orders are shipped from regional Amazon warehouses, thereby reducing exposure to inventory

risk and contributing to operating efficiencies.

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.

Following Russia’s actions, various countries, 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.

Company shut down its operation in Russia and expects to close down the subsidiary in the near future therefore the impact from the

current situation is very limited.

AND ITS SUBSIDIARIES

2 unchanged sentences

2 - Significant Accounting Policies

Unaudited condensed consolidated financial statements:

The accompanying unaudited

condensed consolidated interim financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules

and regulations of the United States Securities and Exchange Commission (“SEC”).

The unaudited condensed consolidated

financial statements are comprised of the financial statements of the Company.

In management’s opinion, the interim financial

data presented includes all adjustments necessary for a fair presentation.

All intercompany accounts and transactions have been eliminated.

Operating results for the nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected

for any future period or for the year ending December 31, 2023.

These unaudited condensed

consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements

and the notes thereto for the year ended December 31, 2022.

Significant Accounting

The significant accounting

policies followed in the preparation of these unaudited interim condensed consolidated financial statements are identical to those

applied in the preparation of the latest annual financial statements.

Critical accounting estimates:

Due to the change of the operating segments as stated in note 7, and the reduction of the company's reporting units

as a result, the company examined the need for impairment for those reporting units.

The estimated fair value of the remaining reporting

units was higher than their carrying amounts, and therefore there was no need to provide for impairment.

condensed consolidated financial statements:

accompanying unaudited condensed consolidated interim financial statements included herein have been prepared by the Company in accordance

with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information

and in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”).

unaudited condensed consolidated financial statements are comprised of the financial statements of the Company.

In management’s

opinion, the interim financial data presented includes all adjustments necessary for a fair presentation.

All intercompany accounts

and transactions have been eliminated.

Operating results for the three months ended March 31, 2024 are not necessarily indicative

of the results that may be expected for any future period or for the year ending December 31, 2024.

unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated

financial statements and the notes thereto for the year ended December 31, 2023.

Accounting Policies:

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

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

accounting estimates:

ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, or between annual tests under certain circumstances, and written down when impaired.

Goodwill is tested for impairment by comparing the fair

value of the reporting unit with it carrying value.

Impairment charge of $ 671 as the carrying value of SaaS Solution reporting segment exceeded its expected fair value,

as determined using a discounted cash flow model which is primarily based on management’s future revenue and cost estimates.

impairment charge was recorded within Impairment of Goodwill, within the Consolidated Statement of Operations, and within the SaaS Solution

segment for the year ended December 31, 2023.

During the first quarter of 2024, there was no more likely than not indication of impairment, therefore no further

impairment testing was required.

Recent adopted accounting pronouncements:

In June 2022, the FASB issued ASC 2022-03 “Fair Value Measurement of Equity Securities Subject to Contractual

Sale Restrictions”.

The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of

the unit of account of the equity security and, therefore, is not considered in measuring its fair value.

The ASU also clarifies that

an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction.

The ASU also introduces new disclosure

requirements for equity securities subject to contractual sale restrictions.

The ASU do not have a material impact on the Company

consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20)

and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40).

This ASU reduces the number of accounting models

for convertible debt instruments and convertible preferred stock and amends the guidance for the derivatives scope exception for contracts

in an entity’s own equity to reduce form-over-substance-based accounting conclusions.

In addition, this ASU improves and amends

the related earnings per share guidance.

This standard became effective for the Company beginning on January 1, 2024.

Adoption is either

a modified retrospective method or a fully retrospective method of transition.

The Company adopted this guidance effective January 1,

2024, and the adoption of this standard did not have a material impact on its consolidated financial statements.

3 - Financial Instruments

7 unchanged sentences

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

September 30, 2023

Fair value hierarchy

Financial assets

Investment in marketable securities (*)

value hierarchy

in marketable securities (*)

AND ITS SUBSIDIARIES

2 unchanged sentences

3 - Financial Instruments (Cont.)

December 31, 2022

Fair value hierarchy

Financial assets

Investment in marketable securities (*)

Derivatives (**)

For the nine and three-month

periods ended September 30, 2023 and 2022, the Company recognized gain (loss) (based on quoted market prices with a discount due

to security restrictions on iMine shares) of the marketable securities was $( 21 ), $( 11 ), $( 7 ) and $( 22 ), respectively.

The Derivatives includes

in other receivables.

December 31, 2022

Fair value hierarchy

Financial liabilities

value hierarchy

in marketable securities (*)

the three-month period ended March 31, 2024 and 2023, the Company recognized gain (loss) (based on quoted market prices with a discount

due to security restrictions on iMine shares) of the marketable securities was $ 5 and $ ( 14 ) , respectively.

4 - Stock Based Compensation

2 unchanged sentences

of Stock Based Compensation Expenses

Nine months ended

September 30,

Three months ended

September 30,

Stock-based compensation expense – Cost of revenues

Stock-based compensation expense - Research and development

Stock-based compensation expense - Sales and marketing

Stock-based compensation expense - General and administrative

compensation expense – Cost of revenues

compensation expense - Research and development

compensation expense - Sales and marketing

compensation expense - General and administrative

Stock-based compensation

10 unchanged sentences

options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.

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

assumptions in the following table.

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

Treasury yield curve

in effect at the time of grant

of Fair Value Assumptions of Stock Option

December 27, 2023, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive

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

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

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

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

and 12,000 restricted shares, respectively.

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

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

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

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

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

exercise price of $ 5.25 per share.

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

the nine and three-month period ended September 30, 2023, the Company granted options to purchase 93,000 shares of common stock under

the 2017 Employee Plan, no options were exercised and options to purchase 6,933 shares of common stock expired.

In addition, 8,000 restricted

shares that were granted to Ezequiel Javier Brandwain were terminated and voided.

total stock option compensation expense for employees during the nine and three-month period ended September 30, 2023 and 2022 which

was recorded was $ 214 , $ 53 $ 52 and $ 9 , respectively.

total stock option compensation expense relating to the Orgad acquisition during the nine and three-month period ended September 30,

2023 and 2022 which was recorded was $ 76 , $ 267 , $ 16 and $ 73 , respectively.

Plan from 36,125

shares to 130,000

February 14, 2024, the Compensation Committee of the Company granted restricted common stock awards under the Company’s 2017

Equity Incentive Plan to Ronen Luzon, Or Kles and Billy Pardo, pursuant to which they were issued 37,500

restricted shares, 18,750

restricted shares and 18,750

restricted shares, respectively.

The restricted shares shall vest in three equal installments on January 1, 2025, January 1, 2026

and January 1, 2027, conditioned upon continuous employment with the Company and subject to accelerated vesting upon a change in

control of the Company.

On the same day, the Company granted a total of 10,000

restricted stock units (“RSUs”) to its directors that will vest on January 1, 2025 and five-years

options to purchase up to 6,875

shares of common stock to other employees of the Company at an exercise price of $ 3.832

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

the three-month period ended March 31, 2024, the Company granted options, restricted stock and RSUs to purchase 91,875

shares of common stock under the 2017 Employee Plan (as described above), no options were exercised and no options were

total stock option compensation expense for employees during the three-month period ended March 31, 2024 and 2023 which was recorded

was $ 67 , and $ 101 , respectively.

total stock option compensation expense relating to the Orgad acquisition during the three-month period ended March 31, 2024 and 2023

which was recorded was $ 3 and $ 35 , respectively.

issued to consultants:

In July 2023, the Company entered into a six month agreement (the “Consultant

Agreement”) with a consultant (the “Consultant”) to provide services to the Company, including assisting the Company

to promote, market and sell the Company’s technology to potential customers and make strategic introductions and inquiries with

interested parties in the financial community.

Pursuant to the Consultant Agreement and in partial consideration for such consulting services,

the Company agreed to issue to Consultant (i) 5,000 shares of restricted common stock of the Company, (ii) a warrant to purchase

12,500 shares of common stock at an exercise price of $4.00 per share and exercisable for a term of 36 months from the date of issuance,

and (iii) a warrant to purchase 12,500 shares of common stock at an exercise price of $6.00 per share and exercisable for a term of 36

months from the date of issuance.

issuance was approved by the Company’s board of directors in February 2024.

During the three-month period ended March 31, 2024 and 2023, the Company

recorded $ 71 , and $ 0 , respectively, as stock-based equity awards with respect to the Consultant.

AND ITS SUBSIDIARIES

36 unchanged sentences

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

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

The mediation was held on July 26, 2023 and various settlement options were explored but the mediation did not lead to settlement.

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

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

Note 6 - Goodwill

During the third quarter

of 2023, the Company merged its two SAAS segments into one segment (see Note 7), which also resulted in a change in the Company’s

composition of reporting units.

After the restructuring, the aggregate carrying amounts of goodwill allocated to each reporting unit are

On March 13, 2023, the Supreme

Court referred the case to its Alternative Dispute Program and ordered the cases to mediate.

The mediation was held on July 26, 2023

and various settlement options were explored but the mediation did not lead to settlement.

On December 21, 2023, a conference with

the Court was held and the parties were given dates for various pre-trial filings.

The next pre-trial conference is scheduled to

be held on May 31, 2024, at which point the Court will schedule the matter for trial on the ultimate claims.

The Company intends

to vigorously defend any claims made by North Empire.

The Company believes it is more likely than not that the counterclaims will

the third quarter of 2023, the Company merged its two software-as-a-service (“SaaS”) segments into one segment (see Note

7), which also resulted in a change in the Company’s composition of reporting units.

In the Company’s financial reporting

for March 31, 2024, comparative information for 2023 was restated to reflect the changes in reportable segments.

After the restructuring, the aggregate carrying amounts of goodwill allocated to

each reporting unit are as follows:

of Aggregate Carrying Amount Of Goodwill

SaaS Solutions

Fashion and equipment e-commerce platform

Based on provisional amounts revised on December 31, 2022

a loss-making segment into other reporting units, was viewed by the Company as an indicator for impairment which required the Company

to perform an interim goodwill impairment assessment.

September 2023, the fair value of each reporting units was determined using the income approach.

The income approach is a forward-looking

approach for estimating fair value.

Within the income approach, the method used is the discounted cash flow method.

The company, using

independent valuation services, starts with a forecast of all the expected net cash flows associated with the reporting unit, which includes

the application of a terminal value, and then applies a discount rate to arrive at a net present value amount.

Cash flow projections

are based on the Company’s estimates of revenue growth rates and operating margins, taking into consideration industry and market

The discount rate used is based on the weighted average cost of capital (“WACC”), adjusted for the relevant risk

associated with country-specific and business-specific characteristics.

If any of these expectations were to vary materially from the

Company’s assumptions, the Company may record an impairment of goodwill allocated to these reporting units in the future.

assumptions used in the discounted cash flow analysis of the SAAS reporting unit included, but were not limited to, a WACC of 24 %,

terminal growth rates of 3 % and EBIT margin which is excepted to gradually increase from a negative margin of 33.1 % in 2024 to a positive

margin of 29.5 % in 2029.

assumptions used in the discounted cash flow analysis of the Fashion and equipment e-commerce platform reporting unit included, but were

not limited to, a WACC of 21.5 %, terminal growth rates of 3 % and EBIT margin which is excepted to gradually increase from a negative

margin of 9.1 % in 2024 to a positive margin of 6.9 % in 2029.

assumptions are deemed as Level III inputs in regard to the fair value hierarchy.

Company concluded based on the results of the interim quantitative goodwill impairment assessment performed as of September 30, 2023,

that goodwill was not impaired in both reporting units.

The fair value of the SAAS reporting unit is approximately 2.7 % above its carrying

amount and fair value of the Fashion and equipment e-commerce platform reporting unit is approximately 9.7 % above its carrying amount.

While there was no impairment related to goodwill for both reporting units, a future potential impairment is possible should actual results

differ from forecasted results used in the valuation analysis.

Also, the valuation of goodwill can differ materially if financial projections

or market inputs used to determine the WACC change significantly.

and equipment e-commerce platform

AND ITS SUBSIDIARIES

2 unchanged sentences

7 – Operating Segments

Effective 1 July 2023 the Company merged its two SAAS segments into

one segment, hence reducing the reportable segments from three to the following two segments:

(i) fashion and equipment e-commerce platform,

and (ii) SaaS based innovative artificial intelligence driven measurement solutions.

This realignment reflects the way resources are allocated

and performance is assessed by the Chief Operating Decision Maker.

The fashion and equipment e-commerce platform which represents Orgad’s

activity that was acquired by the Company in 2022, mainly operates on Amazon.

The SaaS based innovative artificial intelligence driven

measurement solutions, or SaaS Solutions operating segment consists of My Size Inc, My Size Israel, My Size LLC and Naiz Fit.

the Company’s financial reporting for September 30, 2023, comparative information for 2022 was restated to reflect the changes

in reportable segments.

July 1, 2023 the Company merged its two SaaS segments into one segment, reducing its reportable segments from three to the

following two segments:

(i) fashion and equipment e-commerce platform, and (ii) SaaS based innovative artificial intelligence driven

measurement solutions.

This realignment reflects the way resources are allocated and performance is assessed by the Chief Operating

Decision Maker.

The fashion and equipment e-commerce platform which represents Orgad’s activity that was acquired by the

Company in 2022, mainly operates on Amazon.

The SaaS based innovative artificial intelligence driven measurement solutions, or SaaS

Solutions operating segment consists of My Size Inc., My Size Israel, My Size LLC and Naiz Fit.

the Company’s financial reporting for March 31, 2024, comparative information for 2023 was restated to reflect the changes in reportable

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

of Reportable Operating Segments

As of the Nine month ended September 30, 2023

Revenues from external customers

Operating (loss) income

As of September 30, 2023:

For the Nine months ended September 30, 2022

Revenues from external customers

Operating (loss) income

As of Three months ended September 30, 2023

Revenues from external customers

Operating (loss) income

As of Three months ended September 30, 2022

of the three month ended March 31, 2024

from external customers

non-cash items:

and equipment e-commerce platform

of March 31, 2024:

of the three month ended March 31, 2023

from external customers

non-cash items:

Fashion and equipment e-commerce

As of March 31, 2023:

As of the year ended December 31, 2023

Revenues from external customers

Operating (loss) income

Operating loss

Significant non-cash items:

Impairment of goodwill

AND ITS SUBSIDIARIES

2 unchanged sentences

7 – Operating Segments (Cont.)

September 30, 2022:

As of the year ended December 31, 2022

Revenues from external customers

Operating (loss) income

of December 31, 2022:

Fashion and equipment e-commerce platform

As of December 31, 2023:

Long-lived assets, which includes investment in JV,

property, plant and equipment and right of use assets, by geographic region are as follows:

of Consolidated Assets

For the three-month period ended March 31, 2024, 80.06 %

of the Company’s total revenues were generated in the United states, no other foreign destination comprised 10.0% or more of the

Company’s total revenues.

8 – Significant events during the reporting period

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

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

The Company shifted Orgad’s operation to its headquarters.

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

The Company believes that this incident did not affect the future sales results of Orgad for the year of 2023.

The inventory was not insured and the Company and lessor signed an agreement to settle the issue in which the Company paid to the lessor an amount of $ 50 to cover its loss.

The Company recognized the payment to the lessor as a general and administrative expense.

During the reporting period, claims by the owners a neighboring warehouse were made of damage caused by the fire.

As of the date these financial statements were authorized for issuance, no lawsuit was filed against the Company, and the amount of potential

loss, if any, cannot be reasonably estimated.

January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000

of the Company’s shares of common stock and pre-funded warrants to purchase up to 278,899 shares of common stock and, in a

concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, consisting of Series A warrants

to purchase up to 441,899 shares of common stock and Series B warrants to purchase up to 441,899 shares of common stock, at an offering

price of $ 3.055 per share of common stock and associated Series A and Series B warrants and an offering price of $ 3.054 per pre-funded

warrant and associated Series A and Series B warrants.

addition, the Company entered into a securities purchase agreement (the “PIPE Purchase Agreement”) pursuant to which

the Company agreed to sell and issue in a private placement an aggregate of up to 540,098 unregistered pre-funded warrants and unregistered

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

shares of common stock and Series B warrants to purchase up to 540,098 shares of common stock at an offering price of $ 3.054 per

pre-funded warrant and associated Series A and Series B warrants.

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

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, the Company entered into a registration rights agreement (the “Registration Rights Agreement”).

Pursuant to the Registration Rights Agreement, the Company is required to file a resale registration statement (the “Registration

Statement”), with 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 (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.

will be obligated to pay certain liquidated damages if it fails to maintain the effectiveness of the Registration Statement.

to note 16 to the Company’s 10-K for the year ended December 31, 2023, the Company agreed to pay to the former owners of

Orgad, on the two-year and the three-year anniversary anniversaries of the closing of the transaction pursuant to which the Company

acquired 100 % of the shares and voting interests in Orgad, $ 350

in each of these years provided that in the case of the second and third instalments certain revenue targets are met and subject

further to certain downward post-closing adjustment.

In February 2024, the amount of $ 700

was fully paid to the former owners of Orgad net of a settlement amount of $ 275 .

January 8, 2024, the Company provided a notice of six month termination to the lessor that the office lease agreement will end on

July 8, 2024 instead of August 20, 2025.

a result the Company reduced its “Right of use asset” against current liabilities as “Operating lease liability”

and in the non-current liabilities as “Operating lease liability – long term” on the Company’s March 31, 2024

consolidated balance sheets in an amount of $ 181 .

During February 2024, the Company received a loan from commercial lender

in an amount of $ 500 .

The loan bears interest at a fix rate of 6 % of the principal and payable in installments during six month term.

AND ITS SUBSIDIARIES

1 unchanged sentence

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

8 – Significant events during the reporting period (Cont.)

gross proceeds to the Company in respect of the offerings was approximately $ 3,000 , before deducting fees payable to the placement

agent and other offering expenses payable by the Company.

The net proceeds were approximately $ 2,600 .

of September 30, 2023, all the pre funded warrants were exercised.

Company also entered into a letter agreement (the “Engagement Agreement”) with H.C.

Wainwright & Co., LLC (“Wainwright”),

pursuant to which Wainwright agreed to serve as the exclusive placement agent for the Company in connection with the offerings.

Company 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 and clearing fees of $ 15.95 .

Wainwright also received placement agent warrants - to purchase 68,740 shares of common stock, at an exercise price of $ 3.8188 per

share and a term expiring on January 10, 2028.

May 2023, the Company initiated a transfer of the support, development and customer success

operations to its Spanish entity, Naiz Fit, that is intended to improve efficiency and lower

costs between the Company’s operations in Israel and Naiz Fit.

As part of this, the

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

Commercial Officer, Ezequiel Javier Brandwain.

This restructuring did not have a material

impact on the Company’s results.

The Company expects it to lower future operating costs

without significant impact on revenues.

July 13, 2023, the compensation committee of the board of directors of the Company reduced

the exercise price of outstanding options of certain officers and directors of the Company

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 the Company’s

shares on July 13, 2023.

The exercise price reduction includes options held by, among others,

the Company’s 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:

5,760 shares, and (iii) Billy

Pardo, the Company’s Chief Operating Officer and Chief Product Officer:

6,094 shares.

incremental compensation cost resulting from the repricing is approximately $ 10 .

August 24, 2023, the Company entered into an inducement offer letter agreement (the “Inducement

Letter”) with a certain holder (the “Holder”) of certain of the Company’s

existing warrants to purchase up to (i) 1,963,994 shares of the Company’s common stock

issued on January 12, 2023 at an exercise price of $ 2.805 per share (the “January 2023

Warrants”), (ii) 6,864 shares of the Company’s common stock issued on January

17, 2020 at an exercise price of $ 94.00 per share (the “January 2020 Warrants”),

and (ii) 47,153 shares of the Company’s 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 (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 the Company’s common stock at a reduced exercise price of $ 2.09 per

share in consideration of the Company’s agreement to issue new common stock purchase warrants (the “New

Warrants”), to purchase up to an aggregate of 5,367,912 shares

of the Company’s common stock (the “New Warrant Shares”), at an exercise price of $ 2.09 per

The Company 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 the Company.

The net proceeds are approximately $ 3.6 million.

As of September 30, 2023, the

Company issued to the holder 543,012

shares and 1,475,000

9 – Subsequent events

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- see note 1(c).

On November 3, 2023, the Company was

notified, by the Nasdaq Listing Qualifications that the Company is 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 Market.

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

regain 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 July 5, 2022, the Company may

then be eligible for additional 180 days if the Company 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 the Company’s intention to cure the deficiency during the second compliance period .

the Company does not qualify for the second compliance period or fails to regain compliance during the second compliance period, then

Nasdaq will notify the Company of its determination to delist the Company common stock, at which point the Company will have an

opportunity to appeal the delisting determination to a Hearings Panel.

April 15, 2024, the Company announced that the Board approved a one-for-eight reverse stock split of its common stock (the “Reverse

Stock Split”).

Upon the Reverse Stock Split every eight shares of the Company’s issued and outstanding common stock is

automatically converted into one share of common stock, without any change in the par value per share.

The reverse stock split was effected on April 19, 2024 with the Company’s shares beginning trading on a post-split

basis on the Nasdaq on April 23, 2024.

In addition, a proportionate

adjustment was made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding options

and warrants entitling the holders to purchase common stock.

Any fraction of a share of common stock that would otherwise have resulted

from the Reverse Stock Split was rounded up to the next whole number.

November 3, 2023, the Company was notified, by the Nasdaq Listing Qualifications that the Company is not in compliance with the

minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) (the “Rule”) for continued listing on the

The Notification Letter

provided that the Company had 180 calendar days, or until May 1, 2024, to regain compliance with the Rule.

To regain compliance, the

bid price of the Company’s common stock must have had a closing bid price of at least $1.00 per share for a minimum of 10

consecutive business days.

On May 7, 2024, the Company received a letter from Nasdaq that, for the 10 consecutive business days from

April 23, 2024 to May 6, 2024, the closing bid price of the Company’s common stock had been at $1.00 per share or greater.

Accordingly, the Company has regained compliance with Nasdaq Listing Rule 5550(a)(2) and Nasdaq considers the prior bid price

deficiency matter now closed.

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

What changed 10-Q

Item 1. Financial Statements