What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-12 compared with 2024-05-15 · 118 added, 87 removed, 142 unchanged (59% of the section changed)

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information should also be read in conjunction with the information contained in our Annual Report on Form 10-K for the year ended December

31, 2023, filed with the Securities and Exchange Commission, or the SEC on April 1, 2024, or the Annual Report, including the consolidated annual

financial statements as of December 31, 2023 and their accompanying notes included therein.

31, 2023, filed with the Securities and Exchange Commission, or the SEC on April 1, 2024, or the Annual Report, including the consolidated

annual financial statements as of December 31, 2023 and their accompanying notes included therein.

Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of

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performance are not historical facts and are forward-looking statements.

These statements are often, but not always, made through

the use of words or phrases such as “believe,” “will,” “expect,” “anticipate,”

“estimate,” “intend,” “plan” and “would.” For example, statements concerning

financial condition, possible or assumed future results of operations, growth opportunities, industry ranking, plans and objectives

of management, markets for our common stock and future management and organizational structure are all forward-looking statements.

Forward-looking statements are not guarantees of performance.

They involve known and unknown risks, uncertainties and assumptions

that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels of

activity, performance or achievements expressed or implied by any forward-looking statement.

These statements are often, but not always, made through the

use of words or phrases such as “believe,” “will,” “expect,” “anticipate,” “estimate,”

“intend,” “plan” and “would.” For example, statements concerning financial condition, possible or

assumed future results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common

stock and future management and organizational structure are all forward-looking statements.

Forward-looking statements are not guarantees

of performance.

They involve known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity,

performance or achievements to differ materially from any results, levels of activity, performance or achievements expressed or implied

by any forward-looking statement.

forward-looking statements are qualified in their entirety by reference to the risk factors discussed throughout this Quarterly Report

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dollar translations of NIS amounts presented in this Quarterly Report on

Form 10-Q for three months ended on March 31, 2024 are translated using the rate of NIS 3.681 to $1.00.

Form 10-Q for three months ended on June 30, 2024 are translated using the rate of NIS 3.759 to $1.00.

information in this Quarterly Report on Form 10-Q relating to shares or price per share reflects the 1-for-8 reverse stock split effected

by us on April 19, 2024 with the shares beginning trading on a post-split basis on the Nasdaq Capital Market on April 23, 2024.

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

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

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

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

Our advanced software and solutions assists us in

supply chain, identifying products that can drive growth and provides a user-friendly experience and best customer

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

are an omnichannel e-commerce platform and provider of AI-driven software-as-a-service (“SaaS”) measurement solutions,

including MySizeID and our subsidiaries, Naiz Fit, which provides SaaS technology solutions that solve size and fit issues and AI

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

in the global markets.

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

Our advanced software

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

best customer service.

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

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

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Such clashes may escalate in the future into a greater regional conflict.

To date, the war with Hamas has had an immaterial effect on our operations

and financial results.

This is attributable to our global footprint and the offices in Spain, which has become a hub for our sizing solutions

business and the majority of Orgad’s inventory utilizes fulfillment by Amazon rather than fulfilling directly.

of Operations

table below provides our results of operations for the periods indicated.

Three months ended

Six months ended

(dollars in thousands)

Cost of revenues

Gross profit (loss)

Research and development expenses

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Equity accounted losses

Income tax benefit

Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

revenues for the three months ended March 31, 2024 amounted to $2,984,000 compared to $720,000 for the three months ended March 31, 2023.

The increase in the three months ended March 31, 2024 from the corresponding period is primarily attributable to an increase in Orgad

cost of revenues expenses for the three months ended March 31, 2024 amounted to $1,788,000 compared to $1,147,000 for the three months

ended March 31, 2023.

and Three Months Ended June 30, 2024 Compared to Six and Three Months Ended June 30, 2023

revenues for the six months ended June 30, 2024 amounted to $4,963,000 compared to $2,010,000 for the six months ended June 30, 2023.

The increase in the six months ended June 30, 2024 from the corresponding period is primarily attributable to an increase in Orgad sales.

revenues for the three months ended June 30, 2024 amounted to $1,979,000 compared to $1,290,000 for the three months ended June 30, 2023.

The increase in the three months ended June 30, 2024 from the corresponding period is primarily attributable to an increase in Orgad

cost of revenues expenses for the six months ended June 30, 2024 amounted to $2,783,000 compared to $1,918,000 for the six months ended

June 30, 2023.

The increase in comparison with the corresponding period was mainly due to an increase in revenues described above offset

by an inventory mark-down of $643,000 due to the fire that occurred in Orgad’s warehouse during January 2023.

cost of revenues expenses for the three months ended June 30, 2024 amounted to $995,000 compared to $771,000 for the three months ended

June 30, 2023.

The increase in comparison with the corresponding period was mainly due to an increase in revenues described above.

offset by an inventory mark-down of $643,000 due to the fire that occurred in Orgad’s warehouse during January 2023.

and Development Expenses

research and development expenses for the three months ended March 31, 2024 amounted to $132,000 compared to $342,000 for the three months

ended March 31, 2023.

research and development expenses for the six months ended June 30, 2024 amounted to $263,000 compared to $569,000 for the six months

ended June 30, 2023.

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

and a decrease in subcontractor expenses.

research and development expenses for the three months ended June 30, 2024 amounted to $131,000 compared to $227,000 for the three months

ended June 30, 2023.

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

and a decrease in subcontractor expenses.

and Marketing Expenses

sales and marketing expenses for the three months ended March 31, 2024 amounted to $1,102,000 compared to $679,000 for the three months

ended March 31, 2023.

sales and marketing expenses for the six months ended June 30, 2024 amounted to $1,933,000 compared to $1,646,000 for the six months

ended June 30, 2023.

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

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

sales and marketing expenses for the three months ended June 30, 2024 amounted to $831,000 compared to $967,000 for the three months

ended June 30, 2023.

The decrease primarily resulted from a decrease in salary expenses due to reduced headcount, consultant expenses, travel and marketing expenses offset

by an increase in Amazon fees due to the increase in sales.

and Administrative Expenses

general and administrative expenses for the three months ended March 31, 2024 amounted to $1,033,000 compared to $1,044,000 for the three

months ended March 31, 2023.

a result of the foregoing, for the three months ended March 31, 2024, our operating loss was $1,071,000 a decrease of $1,421,000 or 57.0%,

compared to our operating loss for the three months ended March 31, 2023 of $2,492,000.

general and administrative expenses for the six months ended June 30, 2024 amounted to $1,932,000 compared to $1,923,000 for the six

months ended June 30, 2023.

general and administrative expenses for the three months ended June 30, 2024 amounted to $899,000 compared to $879,000 for the three

months ended June 30, 2023.

As a result of the foregoing, for the six months ended June 30, 2024, our

operating loss was $1,948,000 a decrease of $2,098,000 or 51.9%, compared to our operating loss for the six months ended June 30, 2023

of $4,046,000.

As a result of the foregoing, for the three months ended June 30, 2024,

our operating loss was $877,000 a decrease of $677,000 or 43.6%, compared to our operating loss for the three months ended June 30, 2023

of $1,554,000.

Income (Expenses), Net

financial income, net for the three months ended March 31, 2024 amounted to $55,000 compared to financial expense of $146,000 for the

three months ended March 31, 2023 The increase compared to the corresponding period was mainly due to an increase in financial expenses

exchange rate differences.

a result of the foregoing, our net loss for the three months ended March 31, 2024 was $1,016,000, compared to net loss of $2,654,000

for the three months ended March 31, 2023.

financial expenses, net for the six months ended June 30, 2024 amounted to $32,000 compared to financial expenses of $100,000 for

the six months ended June 30, 2023 The decrease compared to the corresponding period was mainly due to a decrease in financial

expenses exchange rate differences.

financial expenses, net for the three months ended June 30, 2024 amounted to $87,000 as opposed to financial income of $46,000 for

the three months ended June 30, 2023.

During the three months ended June 30, 2024, we had financial expenses mainly from exchange rate

differences whereas in the three months ended June 30, 2023 we had financial income from exchange rate differences.

a result of the foregoing, our net loss for the six months ended June 30, 2024 was $1,980,000, compared to net loss of $3,945,000 for

the six months ended June 30, 2023.

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

a result of the foregoing, our net loss for the three months ended June 30, 2024 was $964,000, compared to net loss of $1,291,000 for

the three months ended June 30, 2023.

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

and Capital Resources

our inception, we have funded our operations primarily through public and private offerings of debt and equity securities in the

State of Israel and in the United States

of March 31, 2024, we had cash, cash equivalents, and restricted cash of $1,211,000 compared to $2,264,000 of cash, cash equivalents

and restricted cash as of December 31, 2023.

This decrease primarily resulted from payments that were made to suppliers, resources

that were deployed to grow both businesses and payments related to the Orgad acquisition.

used in operating activities amounted to $1,417,000 for the three months ended March 31, 2024, compared to $2,313,000 for the three months

ended March 31, 2023.

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

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

cash provided by investing activities was $60,000 or the three months ended March 31, 2024, compared to none for the

three months ended March 31, 2023.

cash provided by financing activities was $407,000 for the three months ended March 31, 2024, compared to $2,676,000 for the three

months ended March 31, 2023.

The cash flow from financing activities for the three months ended March 31, 2024 resulted from a loan

compared to the public and private offering that occurred in January 2023.

our inception, we have funded our operations primarily through public and private offerings of debt and equity securities in the State

of Israel and in the United States

of June 30, 2024, we had cash, cash equivalents, and restricted cash of $3,275,000 compared to $2,264,000 of cash, cash equivalents and

restricted cash as of December 31, 2023.

This increase primarily resulted from the warrant repricing transaction that was completed in May 2024, offset by

payments that were made to suppliers, resources that were deployed to grow our businesses and payments related to the Orgad acquisition.

Cash used in operating activities amounted to $2,076,000 for the six months

ended June 30, 2024, compared to $3,640,000 for the six months ended June 30, 2023.

The decrease in cash used in operating activity is

derived mainly from a change in inventory and a decrease in the net loss offset by a change in account receivables and trade payables.

cash provided by investing activities was $60,000 or the six months ended June 30, 2024, compared to none for the six months ended

June 30, 2023.

cash provided by financing activities was $2,961,000 for the six months ended June 30, 2024, compared to $2,596,000 for the six

months ended June 30, 2023.

The cash flow from financing activities for the six months ended June 30, 2024 resulted from the May 2024 warrant repricing transaction and a loan that was received compared to the public and private offering that occurred in January 2023.

expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future.

Based on the projected

cash flows and cash balances as of March 31, 2024, we believe our existing cash will not be sufficient to fund operations for a period

cash flows and cash balances as of June 30, 2024, we believe our existing cash will not be sufficient to fund operations for a period

of more than 12 months.

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

conditions the current war between Israel and Hamas, and a number of other factors, many of which are outside our control, and on our financial

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

are acceptable to us.

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

of operations and financial condition.

conditions the current war between Israel and Hamas, and a number of other factors, many of which are outside our control, and on our

financial performance.

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

that are acceptable to us.

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

results of operations and financial condition.

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

could result in substantial dilution for our current stockholders.

The terms of any securities issued by us in future capital-raising transactions

may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative

securities, which may have a further dilutive effect on the holders of any of our securities then-outstanding.

We may issue additional

shares of our common stock or securities convertible into or exchangeable or exercisable for our common stock in connection with hiring

or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capital-raising or

other business purposes.

The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may

cause the market price of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of

such financings.

In addition, we may incur substantial costs in pursuing future capital financing, including investment banking fees,

legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs.

We may also be required

to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely

impact our financial condition.

Furthermore, any additional debt or equity financing that we may need may not be available on terms favorable

to us, or at all.

If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities

and growth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have

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

The terms of any securities issued by us in future capital-raising

transactions may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants

or other derivative securities, which may have a further dilutive effect on the holders of any of our securities then-outstanding.

may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for our common stock in

connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities

for capital-raising or other business purposes.

The issuance of additional securities, whether equity or debt, by us, or the possibility

of such issuance, may cause the market price of our common stock to decline and existing stockholders may not agree with our financing

plans or the terms of such financings.

In addition, we may incur substantial costs in pursuing future capital financing, including investment

banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs.

also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants,

which may adversely impact our financial condition.

Furthermore, any additional debt or equity financing that we may need may not be

available on terms favorable to us, or at all.

If we are unable to obtain such additional financing on a timely basis, we may have to

curtail our development activities and growth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to

cease our operations, which would have a material adverse effect on our business, results of operations and financial condition.

have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests,

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generally accepted accounting principles issued by the Financial Accounting Standards

The preparation of these financial statements requires us to make estimates and assumptions that affect the reported

amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as

well as the reported expenses during the reporting periods.

Actual results may differ from these estimates under different assumptions

or conditions.

The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of

assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the

reported expenses during the reporting periods.

Actual results may differ from these estimates under different assumptions or conditions.

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis