What changed in this filing

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Item 1. Financial Statements

2024-08-12 compared with 2024-05-15 · 423 added, 325 removed, 175 unchanged (81% of the section changed)

1 unchanged sentence

and Subsidiaries

of March 31, 2024

of June 30, 2024

Dollars in Thousands

AND ITS SUBSIDIARIES

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

Consolidated Interim Financial Statements as of June 30, 2024 (Unaudited)

Consolidated Interim Balance Sheets (Unaudited)

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

and cash equivalents

receivables and prepaid expenses

Current Assets:

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

Cash and cash equivalents

Restricted cash

Short term deposit

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

Current liabilities:

lease liability

non-current liabilities

AND CONTINGENCIES

Stockholders’

stock of $ 0.001 par

value - Authorized:

Issued and outstanding:

641,459 ( * )

and 452,724 ( * )

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

paid-in capital

other comprehensive loss

Operating lease liability

Bank overdraft and short-term loans

Trade payables

Liabilities to Related parties

Other payables

Total current liabilities

Long-term loans

Operating lease liability

Total non-current liabilities

Total liabilities

COMMITMENTS AND CONTINGENCIES

Stockholders’ equity:

liabilities and stockholders’ equity

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

Stock Capital -

Common stock of $ 0.001 par value - Authorized:

250,000,000 shares;

Issued and outstanding:

883,131 (*) and 452,724 (*) as of June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

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

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

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

( * )( 1,147 )

and development

and marketing

and administrative

Six-Months Ended

Three-Months Ended

Cost of revenues (*)

Operating expenses

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.

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**

the six months ended June 30, 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 8 (d).

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

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

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stockholders’

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

Balance as of January 1, 2024

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

Issuance of shares post Business Combination

Effect of reverse stock split

Issuance of shares, net of issuance cost of $ 442

Exercise of shares in abeyance

Total comprehensive loss

Balance as of June 30, 2024

an amount less than $1.

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

other comprehensive

stockholders’

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

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

Accumulated other comprehensive

Total 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 $ 341 (**)

Exercise of warrants and prefunded warrants

Total comprehensive loss

Balance as of June 30, 2023

an amount less than $1

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

other comprehensive

stockholders’

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

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

Accumulated other comprehensive

Total stockholders’

Balance as of April 1, 2024

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

Effect of reverse stock split

Issuance of shares, net of issuance cost of $ 442

Exercise of warrants and prefunded warrants

Total comprehensive loss

Balance as of June 30, 2024

an amount less than $1

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

See note 8 (f).

Accumulated other comprehensive

Total stockholders’

Balance as of April 1, 2023

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

Total comprehensive loss

Balance as of June 30, 2023

an amount less than $1

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

Accumulated other comprehensive

Total stockholders’

Balance as of December 31, 2022

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

Issuance 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

Exercise of shares in abeyance

Total comprehensive loss

Balance as of December 31, 2023

an amount less than $1.

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

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

AND ITS SUBSIDIARIES

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dollars in thousands

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

Six-Months Ended

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 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 receivable

Changes in operating lease liabilities

Change in other receivables and prepaid expenses

Change in trade payables

Change in other payables

Net cash used in operating activities

Cash flows from investing activities:

Proceeds 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.

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 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:

Change in operating lease right-of-use asset and liability

relates to change in cash and cash equivalents and, $( 3 ) to change in restricted cash for the six months ended June 30,

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)

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 “Company”) is developing unique measurement technologies based

on algorithms with applications in a variety of areas, including the apparel e-commerce market, the courier services market and 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

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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.

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 is 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.

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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 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.

On July 25, 2016, the Company’s common stock

began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.

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

inception, the Company has incurred significant losses and negative cash flows from operations

and had an accumulated deficit of $ 61,861 .

The Company 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 June 30, 2024, management is of the opinion that its

existing cash will not be sufficient to fund operations for a period of more than 12 months.

As a result, there is substantial doubt

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and securing sufficient financing, it may need to cease operations.

financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should

the Company fail to operate as a going concern.

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.

financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should the

Company fail to operate as a going concern.

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.

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.

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 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 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.

Such clashes 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.

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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.

Company shut down its operation in Russia and expected to close down its subsidiary, My Size LLC, but due to technical reasons it

is expected to occur in the near future;

therefore, the impact from the current situation is very limited.

AND ITS SUBSIDIARIES

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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.

Operating results for the six months ended June 30, 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

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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.

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.

the first and second quarters of 2024, there was no more likely than not indication of impairment;

therefore, no further impairment

testing was required.

adopted accounting pronouncements:

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.

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.

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

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

value hierarchy

in marketable securities (*)

June 30, 2024

Fair value hierarchy

Financial assets

Investment in marketable securities (*)

AND ITS SUBSIDIARIES

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3 - Financial Instruments (Cont.)

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.

December 31, 2023

Fair value hierarchy

Financial assets

Investment in marketable securities (*)

the six and three-month periods ended June 30, 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 $ 4 ,

respectively.

4 - Stock Based Compensation

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of Stock Based Compensation Expenses

compensation expense – Cost of revenues

compensation expense - Research and development

compensation expense - Sales and marketing

compensation expense - General and administrative

Six months ended

Three months ended

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

Stock-based compensation

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

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

Plan from 36,125 shares to 130,000 shares.

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 per share.

The option vesting period is over three years in three equal portions from

the vesting commencement date.

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

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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 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.

Dividend yield

Expected volatility

Risk-free interest

Contractual term

the six and three-month periods ended June 30, 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), respectively.

No options were exercised and 4,000

options expired.

total stock option compensation expense for employees during the six and three-month periods ended June 30, 2024 and 2023 was $ 146 , $ 79 , $ 162 and $ 44 , respectively.

total stock option compensation expense relating to the Orgad acquisition during the six and three-month periods ended June 30, 2024 and

2023 was $ 3 ,

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.

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

issued to the 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 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.

the six and three-month periods ended June 30, 2024, the Company recorded $ 71

respectively, as stock-based equity awards with respect to the Consultant.

expenses were recorded in the fiscal year ended December 31, 2023 with respect to the Consultant.

AND ITS SUBSIDIARIES

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seeking damages in an amount to be determined at trial, but in no event less than $ 616 .

On August 2, 2018, North Empire filed a Summons

with Notice against the Company, also in the same Court, in which they allege damages in an amount of $ 11,400 arising from an alleged

breach of the Agreement.

On September 6, 2018 North Empire filed a Notice of Discontinuance of the action it had filed on August

On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by the Company against

them, alleging that the Company failed to deliver stock certificates to North Empire causing damage to North Empire in the amount

of $ 10,958 .

North Empire also filed a third-party complaint against the Company’s CEO and now former Chairman of the Board

asserting similar claims against them in their individual capacities.

On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in the same Court, in which they allege

damages in an amount of $ 11,400

arising from an alleged breach of the Agreement.

On September 6, 2018 North Empire filed a Notice of Discontinuance of the action it

had filed on August 2, 2018.

On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced

by the Company against them, alleging that the Company failed to deliver stock certificates to North Empire causing damage to North

Empire in the amount of $ 10,958 .

North Empire also filed a third-party complaint against the Company’s CEO and now former Chairman of the Board asserting

similar claims against them in their individual capacities.

On October 17, 2018, the Company filed a reply to North Empire’s

3 unchanged sentences

On January 6, 2020, the Court granted the motion and dismissed the third-party complaint.

has been completed and both parties have filed motions for summary judgment in connection with the claims and counterclaims.

30, 2021, the Court denied both the Company and North Empire’s motions for summary judgment, arguing there were factual issues

to be determined at trial.

On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.

3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment.

North Empire will file its opposition papers on or before March 31, 2022, and the Company will file reply papers on April 29, 2022.

On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.

filed its opposing brief on December 7, 2022.

Both sides were given an opportunity to file a reply brief.

The Company filed a reply

brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023.

The Appellate Court has scheduled oral argument

for the appeal for February 7, 2023.

Oral argument was held before the Appellate Court on February 7, 2023.

On or about February

28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’s decisions regarding both the Company

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

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

Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims and

counterclaims.

On December 30, 2021, the Court denied both the Company and North Empire’s motions for summary judgment,

arguing there were factual issues to be determined at trial.

On January 26, 2022, the Company filed a notice of appeal of the

summary judgment decision.

On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the

Company’s motion for summary judgment.

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

Company will file reply papers on April 29, 2022.

On or about September 12, 2022, the Court issued its Decision and Order denying

the Company’s motion to reargue.

North Empire filed its opposing brief on December 7, 2022.

Both sides were given an

opportunity to file a reply brief.

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

January 13, 2023.

The Appellate Court has scheduled oral argument for the appeal for February 7, 2023.

Oral argument was held before

the Appellate Court on February 7, 2023.

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

affirmed the lower court’s decisions regarding both the Company and North Empire’s motions for summary judgment and sent

the case back to the Supreme Court.

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 parties are exploring a resolution and the Court has adjourned the pre-trial deadlines.

On July 30, 2024, the

parties provided the Court with a status update regarding a possible resolution of the action.

As such, the Court has instructed the

parties to provide a further update on August 13, 2024.

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 be denied.

July 2024, the Company was served with a legal complaint filed by Shimon Shukron in the Magistrate’s Court in Herzliya for a monetary

award in an amount of NIS 1,895,345

(approximately $ 510 ).

The plaintiff alleges that due to the fire that broke out at Orgad’s warehouse in January 2023, the fire spread to the plaintiff’s

business and caused heavy damage to the structure and contents, inventory of the business and loss of profits.

The Company plans to file

its statement of defense in September 2024.

At this preliminary stage, before any fact finding and pre-trial procedures (including disclosure

of documents) have been conducted and before the statement of defense has been prepared and filed, the Company cannot evaluate the chances

of the claim to succeed.

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

1 unchanged sentence

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:

for June 30, 2024, comparative information for 2023 was restated to reflect the changes in reportable segments.

the restructuring, the aggregate carrying amounts of goodwill allocated to each reporting unit are as follows:

of Aggregate Carrying Amount Of Goodwill

and equipment e-commerce platform

SaaS Solutions

Fashion and equipment e-commerce platform

AND ITS SUBSIDIARIES

2 unchanged sentences

7 – Operating 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

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

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 six and three-month periods ended June 30, 2024, comparative information for 2023 was

restated to reflect the changes in reportable segments.

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

of Reportable Operating Segments

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

As of the six months ended June 30, 2024

Revenues from external customers

Operating loss

Significant non-cash items:

Impairment of goodwill

Fashion and equipment e-commerce platform

As of June 30, 2024:

As of the six months ended June 30, 2023

Revenues from external customers

Operating loss

AND ITS SUBSIDIARIES

2 unchanged sentences

7 – Operating Segments (Cont.)

As of the three months ended June 30, 2024

Revenues from external customers

Operating loss

As of the three months ended June 30, 2023

Revenues from external customers

Operating loss

As of the year ended December 31, 2023

Revenues from external customers

Operating loss

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.

AND ITS SUBSIDIARIES

to Condensed Consolidated Interim Financial Statements (Unaudited)

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

8 – Significant events during the reporting period

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

to note 16 to the Company’s 10-K for the year ended December 31, 2023, which was filed with the SEC on April 1, 2024, 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

5 unchanged sentences

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

and in the non-current liabilities as “Operating lease liability – long term” on the Company’s June 30, 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

to Condensed Consolidated Interim Financial Statements (Unaudited)

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

9 – Subsequent events

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

February 2024, the Company received a loan from a 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.

April 19, 2024, the Company effected a one-for-eight reverse stock split of its common stock (the “Reverse

Stock Split”) with the Company’s shares beginning trading on a post-split basis on the Nasdaq Capital Market on April 23,

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

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.

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 Nasdaq.

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 .

May 16, 2024, 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) 326,514 shares of the Company’s common stock

issued on August 28, 2023 with a twenty-eight month term at an exercise price of $ 16.72 per

share and (ii) 344,475 shares of the Company’s common stock issued on August 28, 2023

with a five and one-half year term at an exercise price of $ 16.72 per share, ((i) and (ii)

collectively, the “Existing Warrants).

to the Inducement Letter, the Holder agreed to exercise for cash its Existing Warrants to purchase an aggregate of 670,989 shares

of the Company’s common stock at a reduced exercise price of $ 4.86 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 1,341,978 shares

of the Company’s common stock, at an exercise price of $ 4.61 per

The Company received aggregate gross proceeds of approximately $ 3.26 million

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

by the Company.

As of June 30, 2024, the Company issued to the Holder 166,989 of

the shares exercised with the remaining 504,000 share

held in abeyance.

Company engaged H.C.

Wainwright & Co., LLC (the “Placement Agent”) to act as its exclusive placement agent in

connection with the transactions contemplated by the Inducement Letter and paid the Placement Agent a cash fee equal to 7.0 %

of the aggregate gross proceeds received from the Holder’s exercise of the Existing Warrants, as well as a management fee

equal to 1.0 %

of the gross proceeds from the exercise of the Existing Warrants.

Upon exercise for cash of any New Warrants, the Company has agreed

in certain circumstances to pay the Placement Agent a cash fee of 7.0 %

of the aggregate gross exercise price paid in cash with respect the exercise of the New Warrants, and a management fee of 1.0 %

of the aggregate gross exercise price paid in cash with respect to the New Warrants.

The Company also issued to the Placement Agent

or its designees warrants (the “Placement Agent Warrants”) to purchase up to 46,969 shares

of common stock (representing 7.0 %

of the Existing Warrants being exercised), which have the same terms as the New Warrants except the Placement Agent Warrants have an

exercise price equal to $ 6.075 per

share ( 125 %

of the reduced exercise price of the Existing Warrants).

Similar to the New Warrants, the Placement Agent Warrants were immediately

exercisable from the date of issuance until the five and one-half year anniversary of such date.

In addition, the Company paid the

Placement Agent up to $ 85 for

non-accountable expenses and other out-of-pocket expenses and $ 16 for

clearing fees.

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