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Item 7. Management’s Discussion and Analysis

2026-04-15 compared with 2025-03-27 · 129 added, 94 removed, 190 unchanged (54% of the section changed)

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those expressed in, or implied by, these forward-looking statements.

We are an omnichannel e-commerce platform and provider of AI-driven SaaS

measurement solutions and our recently acquired subsidiaries, Naiz Fit, which provides SaaS technology solutions that solve size and fit

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

operating in the global markets.

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

Our advanced software

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

customer service.

We are currently focused on driving the commercialization of the Naiz Fit

technology which, enables shoppers to generate highly accurate measurements of their body to find the accurate fitting apparel by using

our Naiz Fit Widget, a simple questionnaire which uses a database collected over the years and allows buyers to know what size to pick

when buying online, reducing returns and increasing conversion rates of sellers.

Naiz Fit syncs the user’s measurement data to a sizing model generated

with our proprietary Garment Modelling technology for each item sold on the ecommerce, and only presents items for purchase that match

their measurements to ensure a correct fit.

We are positioning ourselves as a consolidator of sizing solutions and

new digital experience due to new developments for the fashion industry needs.

Our other product offerings include First Look Smart Mirror

for physical stores and Smart Catalog to empower brand design teams, which are designed to increase end consumer satisfaction, contributing

to a sustainable world and reduce operation costs.

We also recently launched True Feedback, a Go-To-market solution that extracts data

from our Naiz Community mystery shoppers to fine-tune the customer experience offered to fashion buyers, both online and offline.

February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar

are a fashion technology company operating an integrated portfolio of businesses designed to address the most pressing challenges facing

fashion brands and retailers today—size and fit accuracy, excess inventory management, circular economy solutions, and international

market distribution.

Through our subsidiaries, we provide end-to-end support across the fashion value chain:

Naiz Fit, our technology

subsidiary, delivers AI-driven size and fit solutions for fashion e-commerce companies, and includes ShoeSize.Me, a European AI-powered

footwear sizing solution we acquired in September 2025;

Orgad, an online retailer and technology-enabled consumer products company operating

principally as a third-party seller on Amazon;

Percentil, a managed second-hand fashion recommerce platform operating across Southern

and Central Europe;

and Ten Peacks Ltd., a distribution subsidiary focused on marketing and distributing global apparel and footwear

brands in Israel.

strategy is to build an integrated fashion platform—the infrastructure layer that enable fashion brands to address four

critical pain points simultaneously:

size and fit challenges that drive returns and suppress conversion rates;

overstocked and

unsold inventory that erodes margins;

sustainability obligations that increasingly require brands to offer circular economy

and international growth ambitions that require local distribution expertise and relationships.

We believe this integrated approach is

differentiated in the market.

Unlike point solutions that address a single problem, our platform allows brands to work with one group-level

partner across technology, commerce, circularity, and distribution—each business unit reinforcing the others through shared data,

commercial relationships, and infrastructure.

February 7, 2022, My Size Israel entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar

Guy Shalom and Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued

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to the Orgad Sellers, net of a settlement amount of $275,000.

payment of the earn out is further subject in each case to the Orgad

Sellers being actively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating

to material reduction of salary or adverse change in their position with Orgad or its affiliates).

payment of the earn out is further subject in each case to the Orgad Sellers being actively engaged with Orgad at the date such payment

is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adverse change in their position

with Orgad or its affiliates).

connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and six-month lock-up agreements

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protection of debtors.

of Production Unit (Casi Nuevo Kids, S.L.)

May 9, 2025, we acquired, through our wholly-owned Spanish subsidiary New Percentil, the Production Unit of Casi Nuevo, that was judicially

awarded to us in April 2025 within the framework of insolvency proceedings of Casi Nuevo filed with Commercial Court No.

The acquisition was completed on the same day.

total purchase price for the acquisition was €610,806.81 (approximately $679,000), which consists of (i) €40,000 (approximately

$44,500) paid by our wholly-owned subsidiary, Naiz Fit., (ii) €358,196 (approximately $398,000) for the assumption of certain liabilities

owed by Casi Nuevo to its customers, (iii) €48,000 (approximately $53,500) for the assumption of certain debt and social security

payments related to former employees of Casi Nuevo who have transferred to New Percentil in connection with the acquisition, or the Percentil

Employees, and (iv) €164,610 (approximately $183,000) for the assumption of accrued labor liabilities related to the Percentil Employees.

of ShoeSize.Me

September 8, 2025, we entered into the ShoeSize Purchase Agreement with the Sellers, who are the holders of 100% of the share capital

of ShoeSize.Me, pursuant to which the Sellers agreed to sell us all of the issued and outstanding shares of ShoeSize.Me.

The transaction was

closed on the same day, or the ShoeSize Closing Date.

consideration for the purchase of the shares of ShoeSize.Me and in accordance with the ShoeSize Purchase Agreement, the Sellers received

(i) a cash payment of $150,000 and (ii) 241,093 shares of our common stock having an aggregate value of $290,000, determined by dividing

$290,000 by the average closing price of our common stock during the seven trading days immediately preceding the ShoeSize Closing Date.

In addition, pursuant to the ShoeSize Purchase Agreement, we issued to a key employee of ShoeSize a warrant, or the ShoeSize Warrant,

to purchase up to 28,000 shares of our common stock.

The ShoeSize Warrant, which is subject to vesting upon satisfaction of certain service-based,

financial performance and integration milestones, provides for a tiered exercise structure, with (i) 10,000 shares exercisable at $2.00

per share, (ii) 6,000 shares exercisable at $3.00 per share, (iii) 5,000 shares exercisable at $4.00 per share, (iv) 4,000 shares exercisable

at $5.00 per share, and (v) 3,000 shares exercisable at $6.00 per share.

addition to our Israel operations, we historically had operations in Russia through our wholly owned subsidiary, My Size LLC.

mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we ceased most of our efforts in Russia and expect to dissolve

mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we ceased all of our efforts in Russia and expect to dissolve

the subsidiary in the near future.

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

ended December 31

Year ended December 31

(dollars in thousands)

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revenues for the year ended December 31, 2025 amounted to $9,362,000 compared to $8,257,000 for year ended December 31, 2024.

from the corresponding period is primarily attributable to Orgad sales.

from the corresponding period is primarily attributable to Orgad sales as well the inclusion of New Percentil, ShoeSizeMe and Ten Peacks

in the consolidated reporting as of December 31, 2025.

cost of revenues for the year ended December 31, 2025 amounted to $6,362,000 compared to $4,934,000 for the year ended December 31,

The increase in comparison with the corresponding period was due to 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.

The increase in comparison with the corresponding period was due to the inclusion of New Percentil, ShoeSizeMe and Ten Peacks in

the consolidated reporting as of December 31, 2025.

and Development Expenses

research and development expenses for the year ended December 31, 2024 amounted to $429,000, a decrease of $545,000, or approximately

research and development expenses for the year ended December 31, 2025 amounted to $597,000, an increase of $168,000, or approximately

39% compared to $429,00 for the year ended December 31, 2024.

The decrease from the corresponding period primarily resulted from

a decrease in salaries due to reduced headcount and a decrease in subcontractor expenses.

The increase was mainly due to the annual salary increase of the retained

employees in Naiz Fit as well as the hiring of new employees.

and Marketing Expenses

sales and marketing expenses for the year ended December 31, 2024 amounted to $3,114,000 a decrease of $742,000, or 19.2%, compared

to $3,856,000 for the year ended December 31, 2023.

The decrease primarily resulted from a decrease in salaries due to reduced

headcount, consultant expenses, travel and marketing expenses offset by an increase in Amazon fees due to an increase in

and Administrative Expenses

general and administrative expenses for the year ended December 31, 2024 amounted to $3,368 ,000, a decrease of $603,000, or

sales and marketing expenses for the year ended December 31, 2025 amounted to $3,212,000, an increase of $98,000, or approximately 3%

compared to $3,114,000 for the year ended December 31, 2024.

The decrease compared to the corresponding period was mainly due

to a decrease in professional services and insurance expenses.

other income for the year ended December 31, 2024 amounted to $275,000 compared to none for the year ended December 31, 2023.

other income for the year ended December 31, 2024 resulted from certain downward post-closing adjustment that were made in the Orgad

on our analysis, we determined that the carrying value of our SaaS Solutions reporting unit exceeded its fair value and an

impairment charge of $631,000 was recorded for year ended December 31, 2024, compared to $671,000 recorded in impairment of goodwill

for year ended December 31, 2023 for the same reason.

a result of the foregoing, for the year ended December 31, 2024, our operating loss was $3,944,000, a decrease of $2,797 ,000 or 4 1 .5%,

compared to our operating loss for the year ended December 31, 2023 of $6,741,000.

The increase in comparison with the corresponding period was due to the

inclusion of New Percentil in the consolidated reporting as of December 31, 2025.

and Administrative Expenses

Our general and administrative

expenses for the year ended December 31, 2025 amounted to $4,787,000, an increase of $1,419,000, or approximately 42% compared to $3,368,000

for the year ended December 31, 2024.

The increase from the corresponding period is primarily attributable the inclusion of New Percentil,

ShoeSizeMe and Ten Peacks in the consolidated reporting as of December 31, 2025.

was no other income recorded for the year ended December 31, 2025 as compared to the to $275,000 other income for the year ended December

The other income for the year ended December 31, 2024 resulted from certain downward post-closing adjustment that were made

in the Orgad acquisition.

on our analysis, we determined that the carrying value of our SaaS Solutions reporting unit exceeded its fair value and an impairment

charge of $144,000 was recorded for year ended December 31, 2025, compared to $631,000 recorded in impairment of goodwill for year ended

December 31, 2024 for the same reason.

As a result of the foregoing, for the year ended December 31, 2025, our

operating loss was $5,740,000, an increase of $1,796,000 or 46%, compared to our operating loss for the year ended December 31, 2024 of

(Expenses) Income, Net

financial expenses, net for the year ended December 31, 2024 amounted to $51,000 compared to financial income of, $99,000 for the year

ended December 31, 2023.

In 2024, we had financial expenses exchange rate differences offset by an income from fair value revaluation

of investment in marketable securities whereas in 2023 we had financial income from the fair value revaluation of warrants offset by

expenses from exchange rate differences and expenses from fair value revaluation of investment in marketable securities.

a result of the foregoing, our net loss for the year ended December 31, 2024 was $3,9 95 ,000 compared to net loss of $6,380,000 for the

year ended December 31, 2023.

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

Our financial expense, net for the year ended December 31, 2025 amounted

to $112,000 compared to $51,000 for the year ended December 31, 2024.

In 2025, the financial income is attributable

to the exchange rate differences.

As a result of the foregoing, our net loss for the year ended December

31, 2025 was $5,852,000 compared to net loss of $3,995,000 for the year ended December 31, 2024.

The increase in net loss was mainly due

to the reasons mentioned above.

and Capital Resources

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restricted cash as of December 31, 2024.

This increase primarily resulted from the warrant repricing

transaction that was completed in May 2024 and proceeds from warrants that were exercised in December 2024, offset by payments that

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

This decrease primarily resulted from the payments that

were made to suppliers, resources that were deployed to grow our businesses and payments related to acquisition of New Percentil, ShoeSizeMe

and Ten Peacks.

January 2025, we entered into an At The Market Offering Agreement, (the “Offering Agreement”)

with ith H.C.

Wainwright & Co., LLC, as agent (“Wainwright”) pursuant to

which we may offer and sell, from time to time through Wainwright shares of our common stock having an aggregate offering price of up

to $4.1 million .

We agreed to pay Wainwright a commission at a fixed rate of 3.0% of the aggregate gross proceeds from each sale

of the shares under the Offering Agreement.

Wainwright & Co., LLC, as agent (“Wainwright”) pursuant to which

we may offer and sell, from time to time through Wainwright shares of our common stock having an aggregate offering price of up to $4.1

We agreed to pay Wainwright a commission at a fixed rate of 3.0% of the aggregate gross proceeds from each sale of the

shares under the Offering Agreement.

As of the date hereof, we sold 1,833,532 shares pursuant to the Offering Agreement for aggregate

gross proceeds of approximately $3,127,000.

cash used in operating activities was $3,092,000 for the year ended December 31, 2024 compared to $6,106,000 for the year ended December

The decrease in cash used in operating activity is derived mainly from decrease in the net loss, change in inventory offset by change in account receivables.

cash flow from investing activities was $53,000 for the year ended December 31, 2024 compared to net cash provided by investing activities

Net cash used in operating activities was $5,142,000 for the year ended

December 31, 2025 compared to $3,092,000 for the year ended December 31, 2024.

The increase in cash used in operating activity is attributable

to the increase in the net loss, impairment charge, share-based compensation, amortization of intangibles assets of New Percentil and

ShoeSizeMe offset by net working assets.

cash flow used in investing activities was $196,000 for the year ended December 31, 2025 compared to net cash provided by investing activities

of $53,000 for the year ended December 31, 2024.

The net cash provided by investing activities for the year ended December 31, 2024 was

mainly from proceeds from short term deposits and from investment in a JV.

The net cash provided to investing activities for the year ended December 31, 2025 was

the result of the acquisition of New Percentil and ShoeSizeMe.

cash provided by financing activities was $2,995,000 for the year ended December 31, 2025 compared to net cash of $5,594,000 for the

year ended December 31, 2024.

The net cash provided by financing activities for the year ended December 31, 2024 was mainly due to warrant

repricing transaction that was completed in May 2024 and proceeds from warrants that were exercised on December 2024 offset by repayment

of loans in an amount of $735,000.

The net cash provided by financing activities for the year ended December 31, 2025 was the result of the

proceeds from the sale of ordinary shares from the Offering Agreement with Wainwright offset by the payment of loans.

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

projected cash flows and cash balances as of December 31, 2024, we believe our existing cash will not be sufficient to fund

operations for a period of more than 12 months.

As a result, there is substantial doubt about our ability to continue as

a going concern.

We will need to raise additional capital, which may not be available on reasonable

terms or at all.

Additional capital would be used to accomplish the following:

our current operating expenses;

growth opportunities;

and retain qualified management and key employees;

to competitive pressures;

with regulatory requirements;

compliance with applicable laws.

Based on the projected

cash flows and cash balances as of December 31, 2025, we believe our existing cash will not be sufficient to fund operations for a period

of more than 12 months.

As a result, there is substantial doubt about our ability to continue as a going concern .

to raise additional capital, which may not be available on reasonable terms or at all.

Additional capital would be used to accomplish

the following:

finance our current operating

pursue growth opportunities;

hire and retain qualified

management and key employees;

respond to competitive

comply with regulatory

requirements;

maintain compliance with

applicable laws.

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

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

conditions, the Russian invasion of Ukraine, the 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.

conditions, the Russian invasion of Ukraine, the security situation in Israel, 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

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The discount rate used is based on the weighted average cost of

capital (“WACC”), adjusted for the relevant risk associated with business-specific characteristics.

capital, adjusted for the relevant risk associated with business-specific characteristics.

of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited

to the discount rate, the terminal growth rate and the revenue growth rate.

on our analysis, we determined that the carrying value of our SaaS Solutions reporting unit exceeded its fair value and an impairment

on our analysis, we the carrying value of the fashion e-commerce 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.

and an impairment

charge of $144,000 was recorded.

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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-K

Item 7. Management’s Discussion and Analysis