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Item 8. Financial Statements and Supplementary Data

2026-04-15 compared with 2025-03-27 · 1 added, 1285 removed, 4 unchanged (100% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

AND ITS SUBSIDIARIES

FINANCIAL STATEMENTS

OF DECEMBER 31, 2024

DOLLARS IN THOUSANDS

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Balance Sheets

Statements of Comprehensive Loss

Statements of Shareholders’ Equity

Statements of Cash Flows

to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

the Shareholders and Board of Directors

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheets of My Size, Inc.

and subsidiaries (the Company) as of December 31, 2024 and

2023, the related consolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in

the two-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements).

In our opinion,

the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31,

2024, in conformity with U.S.

generally accepted accounting principles.

The accompanying

consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note

1d to the consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and

has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern.

Management’s plans in

regard to these matters are also described in Note 1d.

The consolidated financial statements do not include any adjustments that might

result from the outcome of this uncertainty.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting

Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that

was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material

to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole,

and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the

accounts or disclosures to which it relates.

impairment assessment

discussed in Notes 2i and 7 to the consolidated financial statements, the Company examines on an annual basis whether there is an impairment

of goodwill, or between annual tests in certain circumstances.

The Company performed its annual quantitative impairment test of goodwill

at the reporting unit level using the income approach.

Based on this analysis, the Company determined that the carrying value of its

SaaS Solutions reporting unit exceeded its fair value and an impairment charge of $631 thousand was recorded.

identified the evaluation of the goodwill impairment assessment for the SaaS Solutions reporting unit as a critical audit matter.

degree of subjective auditor judgment was required to evaluate the assumptions used to estimate the fair value of the Company’s

SaaS Solutions reporting unit.

Specifically, the following assumptions had limited observable inputs (i) forecasted reporting unit cost

of sales and operating expenses (ii) revenue growth rates, and (iii) discount rate.

The fair value determined was sensitive to changes

in these key assumptions.

Additionally, specialized skills and knowledge were needed to evaluate the discount rate.

following are the primary procedures we performed to address this critical audit matter.

We evaluated the design of certain internal

controls related to the Company’s goodwill impairment evaluation process.

We performed sensitivity analyses to assess the impact

of reasonably possible changes to the forecasted cost of sales and operating expenses, revenue growth rates, and discount rate assumptions

on the Company’s determination of the reporting unit’s fair value.

We evaluated the Company’s revenue growth rates

by comparing the growth projections to industry reports.

We compared the Company’s historical forecasted revenue, cost of sales,

and operating expenses to historical actual results to assess the Company’s ability to accurately forecast cash flows.

valuation professionals with specialized skills and knowledge, who assisted in evaluating the Company’s discount rate by assessing

the Company’s inputs to the discount rate as compared to publicly available data for comparable entities.

Somekh Chaikin

Firm of KPMG International

have served as the Company’s auditor since 2017.

AND ITS SUBSIDIARIES

BALANCE SHEETS

dollars in thousands (except share data)

and cash equivalents

receivables and prepaid expenses

current assets

term deposits

and equipment, net

right-of-use asset

in marketable securities

Total non-current assets

and shareholders’ equity

lease liability

overdraft and short-term loans

to Related parties

current liabilities

lease liability

non-current liabilities

CONTINGENCIES

AND COMMITMENTS

Shareholders’

stock of $ 0.001 par value - Authorized:

250,000,000 shares as of December 31,2024 and 2023;

Issued and outstanding:

2,040,159 and

452,724 (*) as of December 31,2024 and 2023, respectively

paid-in capital

other comprehensive loss

shareholders’ equity

liabilities and shareholders’ equity

to give retroactive effect of 1:8 reverse stock split effected in April 2024, see note 13 (b)

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

AND ITS SUBSIDIARIES

STATEMENTS OF COMPREHENSIVE LOSS

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

ended December 31,

and development

and marketing

and administrative

operating expenses

income (expense), net

loss of equity method investees

before income taxes

loss for the year

comprehensive income (loss):

currency translation differences

comprehensive loss

and diluted loss per share

and diluted weighted average number of shares outstanding

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

AND ITS SUBSIDIARIES

STATEMENTS OF SHAREHOLDERS’ EQUITY

dollars in thousands (except share data)

comprehensive

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

Issuance of Exercise of warrants and prefunded

Total comprehensive income

Balance as of December 31, 2023

Stock-based compensation related to options

and restricted shares granted to employees and consultants

Issuance of shares for sellers post Business

Effect of reverse stock split

Issuance of shares, net of issuance cost of $ 442

Exercise of shares in abeyance

Exercise of Warrants

Total comprehensive income

Balance as of December 31, 2024

an amount of less than $1.

to give retroactive effect of 1:8 reverse stock split effected in April 2024, see note 13 (b).

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

AND ITS SUBSIDIARIES

STATEMENTS OF CASH FLOWS

dollars in thousands

ended December 31,

flows from operating activities:

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

on Disposal of property and equipment

in operating lease right-of-use asset

of intangible assets

exchange differences

in liabilities to related parties

on long term liabilities

of investment in marketable securities

in Investment in JV

based compensation

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 short term deposits

from liquidating JV

of property and equipment

cash (used in) provided by investing activities

flows from financing activities:

from issuance of shares, net of issuance costs and exercise of warrants

cash provided by financing activities

of exchange rate fluctuations on cash and cash equivalents

in cash and cash equivalents and restricted cash

and cash equivalents and restricted cash at the beginning of the year

and cash equivalents and restricted cash at the end of the year

Non cash activities:

Change in operating lease right-of-use asset and liability due to termination of the lease agreement

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

is developing unique measurement technologies based on algorithms with applications

focused on the apparel e-commerce market.

The technology

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

in a variety of novel ways.

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

and customer base.

the acquisition of Orgad International Marketing Ltd.

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

e-commerce platform.

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

Ltd all of which are incorporated in Israel, My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies,

S.L., a limited liability company incorporated under the laws of Spain.

References to the Company include the subsidiaries unless

the context indicates otherwise.

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

(“Topspin”), a private company

registered in the State of Delaware.

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

Subsequently, in February

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

Topspin was engaged, through its Israeli subsidiary, in research and development

in the field of cardiology and urology.

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.

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

This is attributable to its offices in Spain which has become a hub for the Company’s sizing solutions business.

The majority of Orgad’s

inventory utilizes fulfillment by Amazon rather than fulfilling directly.

Inventory is now maintained and orders are shipped from

regional Amazon warehouses, thereby reducing exposure to inventory risk and contributing to operating efficiencies.

On January 19, 2025, a temporary ceasefire went into effect, the result of which is uncertain.

February 24, 2022, Russia invaded Ukraine.

The hostilities between the two countries could result in more widespread

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

Following Russia’s actions, various countries, issued broad-ranging

economic sanctions against Russia.

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

companies, officials and oligarchs;

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

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

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

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

situation is very limited.

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

1 - GENERAL (Cont.)

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 has an accumulated deficit of

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 the date of these financial statements, management is

of the opinion that there is an uncertainty that its existing cash will be sufficient to fund operations for a period of more than

As a result, there is substantial doubt about the Company’s ability to continue as a going concern.

plans include the continued commercialization of the Company’s products and acquisition of technology, intellectual property or

businesses and securing sufficient financing through the sale of additional equity securities, debt or capital inflows from strategic

partnerships.

Additional funds may not be available when the Company needs them, on terms that are acceptable to it, or at all.

Company is unsuccessful in commercializing its products and securing sufficient financing, it may need to cease operations.

The 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.

2 - SIGNIFICANT ACCOUNTING POLICIES

consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S.

applied on a consistent basis, as follows:

Use of estimates:

preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates, judgments and assumptions that

affect the amounts reported in the financial statements and accompanying notes.

Actual results could differ from those estimates.

about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates that have

a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are

included in the following units reporting:

impairment of non-financial assets

Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that are

allocated to reporting units, in accordance with the accounting policy presented in Note 1 (h) below.

The fair value calculations of

reporting units require the use of estimates.

information on key assumptions used in calculation of the fair value, see NOTE 7 – Goodwill and other Intangible assets.

Functional currency:

currency of the primary economic environment in which the operations of the Company is conducted is the U.S.

Dollar and thus

it is the Company’s functional currency.

The reporting currency according to which these financial statements are prepared is the

currency of the primary economic environment in which the operation of the subsidiaries, My Size Israel and Orgad International Marketing

functional currency is the New Israeli Shekel (“NIS”).

currency of the primary economic environment in which the operation of the subsidiary, My Size LLC, functional currency is the

Russian Ruble.

currency of the primary economic environment in which the operation of the subsidiary, Naiz fit, functional currency is the

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Principles of consolidation:

consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

All intercompany balances and

transactions have been eliminated upon consolidation.

Cash equivalents:

equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or

less at the date acquired.

Restricted cash

cash are deposits for rent, credit card and for hedging activities.

are measured at the lower of cost or net realizable value.

The cost of inventories comprises of the costs incurred in bringing the inventories

to their present location and condition.

Net realizable value is the estimated selling price in the ordinary course of business.

point of the loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances

do not result in the restoration or increase in that newly established cost basis.

The costs of purchase of inventories comprise the

purchase price and other costs directly attributable to the acquisition of finished goods.

Net realizable value is the estimated selling

price in the ordinary course of business.

At the point of the loss recognition, a new, lower-cost basis for that inventory is established,

and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

In 2024 and 2023, the company recorded an inventory mark-down of $ 30 and $ 39 respectively.

Property and equipment:

and equipment are stated at cost, net of accumulated depreciation.

Depreciation is calculated by the straight-line method over the estimated

useful lives of the assets, at the following annual rates:

OF PROPERTY AND EQUIPMENT ANNUAL RATE

Computers and peripheral equipment

Office furniture and equipment

Leasehold improvements

Over the term of the lease or the useful life of the improvements, whichever is shorter

Impairment of long-lived assets:

Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”,

whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets

to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to

be generated by the assets.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by

which the carrying amount of the assets exceeds the fair value of the assets.

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)

represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination.

Under ASC 350, “Intangible - Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment

350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual

tests in 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.

350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment

If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing

If it does result in a more likely than not indication of impairment, the impairment test is performed.

Goodwill is not

deductible for income tax purposes.

Goodwill from the Orgad acquisition was allocated to the fashion and equipment e-commerce platform

segment and goodwill from Naiz acquisition was allocated to the Naiz segment based innovative artificial intelligence driven measurement

Alternatively,

ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the first step

of the goodwill impairment test.

impairment charges of $ 631 and $ 671

were recorded as the carrying value of the 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.

These impairment charges

were recorded within the Consolidated Statement of Operations and within the SaaS Solution segment for

the year ended December 31, 2024 and 2023 respectively.

See Note 7- Goodwill.

Intangible assets:

assets consist of identifiable intangible assets that the Company has acquired from previous business combinations.

Intangible assets

are recorded at costs, net of accumulated amortization.

The Company amortizes its intangible assets reflecting the pattern in which the

economic benefits of the intangible assets are consumed.

When a pattern cannot be reliably determined, the Company uses a straight-line

amortization method.

Amortization is calculated by the straight-line method over the estimated useful lives of the following assets.

estimated useful lives of the company’s intangible assets are as follows:

SCHEDULE OF INTANGIBLE ASSETS ESTIMATED USEFUL LIVES

Relationships

period, the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstances

warrant a revision to the remaining period of amortization.

Severance pay:

My Size Israel’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law

(“Section 14”).

Under Section 14, employees in Israel are entitled to have monthly deposits, at a rate of 8.33 %

of their monthly salary, made on their behalf to their insurance funds.

Payments in accordance with Section 14 exempt My Size Israel

from any additional obligation for these employees.

As a result, My Size Israel does not recognize any liability for severance pay

due to these employees and the deposits under Section 14 are not recorded as an asset in its balance sheet.

contributions for compensation represent defined contribution plans and expenses are recorded based on actual deposits.

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Research and development costs:

and development costs are charged to the statement of operations, as incurred.

Most of the research and development expenses are for

wages, related expenses and subcontractors.

development costs also include costs to develop software to be used solely to meet internal needs and cloud-based applications used to

deliver our services.

The Company capitalizes development costs related to these software applications once the preliminary project stage

is complete and it is probable that the project will be completed and the software will be used to perform the function intended.

capitalized for developing such software applications were not material for the periods presented and therefore were not capitalized.

Income taxes:

Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities

for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’

Deferred taxes are determined based on the difference between the financial statement carrying amount and the tax basis

of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based

upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized.

The Company establishes a valuation allowance, if necessary, to reduce deferred tax assets to the amount more likely than not to be realized.

As of December 31, 2023, and 2022, a valuation allowance was established by the Company to reduce the deferred tax assets to the amount

supported by future reversals of existing temporary taxable differences.

Company implements a two-step approach to recognize and measure the benefit of its tax positions.

The first step is to evaluate the tax

position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely

than not that, on an evaluation of the technical merits, the tax position will be sustained on examination, including resolution of any

related appeals or litigation processes.

The second step is to measure the tax benefit as the largest amount that is greater than 50

percent (cumulative basis) likely to be realized upon settlement.

The Company believes that its tax positions are all highly certain

of being upheld upon examination.

As such, as of December 31, 2024 and 2023 the Company has not recorded any unrecognized tax benefits.

Accounting for stock-based compensation:

Company accounts for its employees’ stock-based compensation as an expense in the financial statements based on ASC 718.

are equity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution

approach to recognize compensation cost over the vesting period.

The Company estimates stock option grant date fair value using the Binomial

and Black Scholes option pricing-model.

Company recorded stock options issued to non-employees at the grant date fair value and recognizes expenses over the related service

period by using the straight-line attribution approach in accordance with ASU 2018-07.

All awards are equity classified.

expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative

of expected future trends.

risk-free interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield

from US treasury zero-coupon bonds with an equivalent term.

Company has historically not paid dividends and has no foreseeable plans to pay dividends.

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Fair value of financial instruments:

820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework for

measuring fair value.

The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market

data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant

assumptions developed based on the best information available in the circumstances.

ASC 820 defines fair value as the price that would

be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement

date, essentially an exit price.

In addition, the fair value of assets and liabilities should include consideration of non-performance

risk, which for the liabilities described below includes the Company’s own credit risk.

a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the

valuation methodologies in measuring fair value:

based on quoted prices in active markets for identical assets that the Company has the ability to access.

Valuation adjustments and

block discounts are not applied to Level 1 instruments.

Since valuations are based on quoted prices that are readily and regularly

available in an active market, valuation of these products does not entail a significant degree of judgment.

based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly

or indirectly.

based on inputs that are unobservable and significant to the overall fair value measurement.

Company holds shares in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publicly-traded

company on the OTCQB.

to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price

for an otherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the

effect of the sales restrictions and is therefore, ranked as Level 2 asset.

Basic and diluted net loss per share:

net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year.

income per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutive

potential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”.

For the years ended December 31, 2024 and 2023, all outstanding options and warrants have been excluded from the calculation of the diluted

net loss per share since their effect was anti-dilutive.

Concentrations of credit risk:

instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash and

cash equivalents.

and cash equivalents are invested in banks in Israel, Spain and United States.

Such deposits in Israel may be in excess of insured limits

and are not insured in other jurisdictions.

Management believes that the financial institutions that hold the Company’s investments

are financially sound and, accordingly, minimal credit risk exists with respect to these investments.

Company and its subsidiaries have no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts

or other foreign hedging arrangements.

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Revenue Recognition:

Company’s revenues are comprised of two main categories:

(1) selling products to customers, and (2) licensing cloud-enabled software

subscriptions, associated software maintenance and support.

Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”).

with a customer exists only when:

the parties to the contract have approved it and are committed to perform their respective obligations,

the Company can identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”),

the Company can determine the transaction price for the goods or services to be transferred, the contract has commercial substance and

it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods or services that

will be transferred to the customer.

from licensing cloud-enabled software subscriptions include subscription fees from customers accessing the Company’s enterprise

cloud services.

Cloud services allow customers to use the Company’s software without taking possession of the software.

is generally recognized ratably over the contract term.

Substantially all of the Company’s subscription service arrangements are

non-cancelable and do not contain refund-type provisions.

Company also sells products directly to customers mainly through its online Amazon stores.

the Company’s standard contract terms, customers have a right of return within 30 until 90 days.

For contracts with rights of return,

the Company recognizes revenue based on the amount of the consideration which the Company expects to receive for products which are not

expected to be returned and recognizes a refund liability for the amount not expected to be received.

At the end of each reporting period,

the Company updates its estimates of expected product returns and adjusts the refund liabilities with a corresponding adjustment in revenues.

The Company recorded an allowance for returns in the amounts of $ 164 thousand and $ 260 thousand as of December 31, 2024, and 2023, respectively.

The allowance for returns is recorded as decrease in revenues against other payables.

Company maintains a returns policy that allows its customers to return product within a specified period of time.

The estimate of the

provision for returns is based upon historical experience with actual returns.

versus Agent Considerations

Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers,

by assessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal)

or to arrange for those goods to be provided by the other party (agent).

With regard to products being sold by Orgad through Amazon,

this determination involves judgment.

The Company determined it is a principal, as it has determined that it controls the promised product

before it is transferred to the end customers, it is primarily responsible for fulfilling the promise to provide the goods, and it has

discretion in establishing prices.

Therefore, the revenues are recorded on a gross basis.

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Contingencies and Commitments

for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable

that a liability has been incurred and the amount can be reasonably estimated.

Legal costs incurred in connection with loss contingencies

are expensed as incurred.

Derivative instruments

Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.

Company leases include an office space lease agreement for 12 months, with an option to extend for an additional 12 months and 36

months cancelable operating lease agreements on behalf of personnel vehicles.

The lease term includes a non-cancellable period of

the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company

is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.

assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation

to make lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement date based on

the present value of lease payments over the lease term.

The Company generally uses its incremental borrowing rate based on the estimated

rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date.

Lease expense for lease

payments is recognized on a straight-line basis over the lease term.

the office rent lease, the Company has elected to account for the lease and non-lease maintenance components as a single lease component.

Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including in-substance

fixed payments, owed over the lease term.

Recent 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 is effective for fiscal years

beginning after December 15, 2024, and interim periods within those fiscal years.

Early adoption is permitted for both interim and

annual financial statements that have not yet been issued or made available for issuance.

The adoption of ASC 2022-03 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

December, 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income

taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income

tax-related disclosures.

The ASU will be effective for fiscal years beginning after December 15, 2024, and allows adoption on a prospective

basis, with a retrospective option.

The Company is in the process of assessing the impacts and method of adoption.

This ASU will

impact the Company’s income tax disclosures, but not Consolidated Financial Statements.

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, This guidance

expands public entities’ segment disclosures primarily by requiring disclosure of significant segment expenses that are regularly

provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and

description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and

assets which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment

The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal

years beginning after December 15, 2024.

The amendments were applied retrospectively to all prior

periods presented in the financial statements.

the Company adopted ASU 2023-07 in 2024, see

Note 16—Segment Reporting.

Recently issued not yet adopted accounting pronouncements

In March 2024, the SEC adopted new rules relating to the disclosure of a range of climate-change-related physical and transition risks,

data, and opportunities.

The adopted rule contains several new disclosure obligations, including, (i) disclosure on how the board of directors

and management oversee climate-related risks and certain climate-related governance items, (ii) disclosure of information related to a

registrant’s climate-related targets, goals, and/or transition plans, and (iii) disclosure on whether and how climate-related events

and transition activities impact line items above a threshold amount on a registrant’s consolidate financial statements, including

the impact of the financial estimates and the assumptions used.

This new rule will be effective in the Company’s annual disclosures

starting from the year ending December 31, 2027.

The Company is in the process of assessing the impact on its consolidated financial statements

and disclosures.

November 2024, the FASB issued ASU No.

2024-03 Income Statement—Reporting Comprehensive

Income—Expense Disaggregation Disclosures (Subtopic 220-40).

The ASU improves the disclosures

about a public business entity’s expenses and provides more detailed information about

the types of expenses in commonly presented expense captions.

The amendments require that

at each interim and annual reporting period an entity will, inter alia, disclose amounts

of purchases of inventory, employee compensation, depreciation and amortization included

in each relevant expense caption (such as cost of sales, SG&A and research and development).

The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods

within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

3 - CASH AND CASH EQUIVALENTS

Company’s cash and cash equivalents balance at December 31, 2024 and 2023 is denominated in the following currencies:

OF CASH AND CASH EQUIVALENT BALANCE

Israeli Shekels

Cash and cash equivalents

4 - OTHER RECEIVABLES AND PREPAID EXPENSES

OF OTHER RECEIVABLES AND PREPAID EXPENSES

expenses and other current assets

reimbursement

loan was given by the Company to a third party in March 2023 and bears annual interest of 9 % per annum.

The maturity date of the

loan was December 31,2024.

The loan was paid in full on December 16, 2024.

5 - PROPERTY AND EQUIPMENT, NET

OF PROPERTY AND EQUIPMENT, NET

as at January 1, 2023

as at December 31, 2023

as at December 31, 2024

as at January 1, 2023

as at December 31, 2023

as at December 31, 2024

at December 31, 2023

at December 31, 2024

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

August 2019, the Company entered into an office space lease agreement.

lease term was for 36

months beginning on August 20, 2019 and ending on August

20, 2022 , with an option

to extend for an additional 36 months .

During 2022, the Company extended the lease period until August 20, 2025.

8, 2024 the Company provided a six month notice termination to the lessor that the lease will end on July 8, 2024.

As 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 December 31, 2024

consolidated balance sheets in an amount of $ 181 .

In August 2024, the Company entered into a new office space lease agreement.

The lease term is for 12 months beginning on July 1, 2024 and ending on June 30, 2025, with an option to extend for an additional 12 months.

rent payments for the previous office space including utilities amounted to approximately USD 14

(NIS 49,500 )

For the new office space the monthly rent payments including utilities amounted to approximately $ 2

addition, the Company entered into a three-year cancelable operating lease agreement for cars.

operating leases are included in “Right of use asset” on the Company’s December 31, 2024 consolidated balance

sheets and represent the Company’s right to use the underlying asset for the lease term.

The Company’s obligations to

make lease payments are included in the current liabilities as “Operating lease liability” and in the non-current

liabilities as “Operating lease liability - long term” on the Company’s December 31, 2024 consolidated balance

As of December 31, 2024, right-of-use of asset was $ 23 based on the extension of the lease period ( 24 months in total).

Operating lease liabilities were $ 15

and non current operating lease liabilities were $ 8 .

the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present

value of the lease payments.

interest rate used to discount future lease payment was 21.8 %.

of lease liabilities as of December 31, 2024 were as follows:

SCHEDULE OF MATURITIES OF LEASE LIABILITIES

imputed interest:

lease liabilities

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

7 – Goodwill and other Intangible assets

intangible assets

of Intangible assets

OF GOODWILL AND INTANGIBLE ASSETS

Relationships

of January 1, 2023

of changes in exchange rates

of December 31, 2023

of changes in exchange rates

of December 31, 2024

Goodwill and intangible assets, Cost, beginning

of January 1, 2023

of changes in exchange rates

of December 31, 2023

of changes in exchange rates

of December 31, 2024

Goodwill and intangible assets, Amortization, ending balance

of December 31, 2023

of December 31, 2024

and intangible assets, Carrying amount, ending balance

expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:

OF AMORTIZATION EXPENSES INTANGIBLE ASSETS

and marketing

relationships

and marketing

amortization expenses

amortization expenses are expected to be as follows:

OF FUTURE AMORTIZATION EXPENSES

amortization expenses

the fourth quarter of 2024, the Company performed the annual assessment of the useful life of its finite-lived intangibles.

updated the useful life of its technology intangibles as a result of analyzing recent quantitative and qualitative observations

in the market and factors impacting our business.

The change in estimate will be accounted for prospectively.

weighted average remaining life was increased from approximately 3 years to 7 years to reflect the new estimated useful lives.

estimates that there will be an approximately 55 - 60 % decrease to annual amortization expense.

changes in the carrying amount of goodwill for the years ended December 31, 2024 and 2023 were as follows:

as of December 31, 2022

as of December 31, 2023

as of December 31, 2024

Company operates its business through two reporting segments:

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

artificial intelligence driven measurement solutions See Note 16 for additional segment information.

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

7 – Goodwill and other Intangible assets (Cont.)

Company determines the fair value of its reporting units using the income approach.

According to the income, the Company uses discounted

cash flows to estimate the fair value.

Cash flow projections are based on the Company’s estimates of revenue growth rates and operating

margins, taking into consideration the industry’s and market’s conditions.

The discount rate used is based on the weighted

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

Goodwill impairment in 2023

Company performed a quantitative assessment as of December 31, 2023 for the reporting units’ fair value.

Based on the December 31, 2023 revised

discounted cash flows analysis, the Company recorded a goodwill impairment of $ 671 to its SaaS Solution reporting unit.

based the following assumptions:

OF ESTIMATED FAIR VALUE

and equipment e-commerce platform

No goodwill impairment

was recorded for the Fashion and equipment e-commerce platform reporting unit.

Goodwill impairment

the third quarter of 2024, the Company has experienced sustained decreases in the

Company’s share price and a decline in actual and forecasted operating results, prompting impairment assessments of goodwill

and long-lived assets including definite-lived intangibles.

Company updated the forecasted future cash flows used in the impairment assessment, including revenues, margin, and capital expenditures

to reflect current conditions.

Other changes in valuation assumptions included selection of lower revenue growth rates based upon an

assessment of current market conditions.

Considering the adverse

developments in its businesses which are described above, the Company recorded a goodwill impairment of $ 631 in the third quarter, which

was attributable to the entire remaining goodwill associated with its SaaS solutions segment (level 3 fair value measurement).

The resulting cash flow

for the SaaS based innovative artificial intelligence driven measurement solutions reporting unit amounts were discounted using the same

rate of 25 % compared to prior quarters, the Company used revenue growth rate of 4 %- 32 % compared to 15 %- 70 % at December 2023.

still assumed a terminal growth rate of 3 %.

the tests performed in September 30, 2024, the resulting cash flow for the fashion and equipment e-commerce platform segment amounts

were discounted using a slightly increased rate of 22 %

compared to 21.5 %

in prior quarters, The Company used a revenue growth rate of 7.5 % - 36.5 %

compared to 12.4 % - 50 %

at December 2023.

The Company still assumed a terminal growth rate of 3 % .

No goodwill impairment was recorded for this reporting unit.

Company performed it annual quantitative assessment as of December 31, 2024 for the fashion and equipment e-commerce platform reporting unit fair value.

The estimated fair value of the fashion and equipment e-commerce platform reporting unit exceeded its estimated carrying amount by 5 % .

This was based on the following assumptions:

Fashion and equipment e-commerce platform

Discount rate

Terminal growth rate

Revenue growth rate

7.5 % - 65.6 %

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

8 - Investment in JV

August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil.

The Company holds 51 % and

Santista Têxtil holds 49 % of the JV.

The purpose of the JV is to serve the Brazilian market according to the business plan that

Both parties agree to make an initial investment in the JV of $ 198 that will be made per the holding percentage of each party.

March 2024, the Company closed the joint venture (“JV”) in Brazil with Santista Têxtil and liquidating the remaining of its investment of

the years ended December 31, 2024 and 2023, the Company recognized equity loss from the JV in an amount of $ 0 and $ 71 respectively.

9 - Financial Liabilities

book value of each of the financial liability categories is an acceptable approximation of fair value.

financial liability maturities during the five years following the end of the financial year are shown below:

SCHEDULE OF FINANCIAL LIABILITY MATURITIES

with credit institutions

in an amount of $ 48 bearing interest between prime to prime + 1.5 % is due between March 2025 to February 2028.

in an amount of $ 191 bearing interest between 1.5 %- 3.5 % is due between December 2024 and June 2028.

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 is payable in installments during a six month term.

The Company repaid the loan in full by August

10 - RELATED PARTY TRANSACTIONS

Balances with related parties:

following related party payables are included in liability to related parties:

SCHEDULE OF RELATED PARTY PAYABLES

related parties (**)

related parties

Due to related parties

amount includes the net salary payable.

amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and

former owners of Naiz that entitled to additional cash consideration.

Related parties benefits:

SCHEDULE OF RELATED PARTIES BENEFITS

and related expenses

based payments

liability and equity liability expenses related to acquisitions (**)

Related parties benefits

amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration

and former owners of Naiz that are entitled to additional cash consideration.

11 - FINANCIAL INSTRUMENTS

following tables present the Company’s significant assets and liabilities that are measured at fair value on recurring basis and

their classification within the fair value hierarchy:

SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS

value hierarchy

in marketable securities

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

11 - FINANCIAL INSTRUMENTS (Cont.)

value hierarchy

in marketable securities

carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables

and prepaid expenses, trade payable and accounts payable approximate their fair value due to the short-term maturities of such instruments.

December 31, 2024, the recognized profit (loss) and fair value (based on quoted market prices with a discount due to security

restrictions on iMine shares) of the marketable securities were $ 1

respectively (at December 31, 2023 $( 41 )

respectively).

12 - TAXES ON INCOME

December 31, 2024, the Company had U.S.

federal net operating loss carryforwards of approximately $ 28,097 available to reduce future

taxable income of which $ 16,323

will expire from 2025 until 2037 and the

remaining amount of $ 11,774

may be carried forward to offset against

future income for an indefinite period of time.

Utilization of the U.S.

net operating losses may be subject to substantial limitations

due to the change of ownership provisions of the Internal Revenue Code of 1986.

My Size, Inc.

has final tax assessments through 2020.

corporate income tax rate 21%.

hereunder are the income tax rates relevant to the Company’s Israeli subsidiaries:

SCHEDULE OF TAX RATES RELEVANT TO THE COMPANY'S ISRAELI SUBSIDIARY

hereunder are the income tax rates relevant to the Company’s Spanish subsidiary:

Company’s Israeli subsidiaries have estimated total available operating loss carryforwards of approximately $ 68,014

as of December 31, 2024.

Of these carryforwards, a total of $ 40,378

owned by Topspin Medical (Israel) Ltd.

Topspin’s operating loss carryforwards may be offset only by future income with respect

to the same operational activity by which it was incurred for an indefinite period of time.

The other operating loss carryforwards are

owned by My Size Israel 2014 Ltd and Orgad (subsidiary) may be carryforward to offset against future income for an indefinite period

Medical (Israel) Ltd.

and My Size (Israel) 2014 Ltd.

has final tax assessments through 2017.

has estimated total available operating loss carryforwards of approximately $ 1,922 as of December 31, 2024.

Naiz’s operating loss carryforward

may be used to offset against future income for an indefinite period of time.

and foreign components of loss, before income taxes consisted of:

OF COMPONENTS OF LOSS FROM CONTINUING OPERATIONS, BEFORE INCOME TAXES

before income taxes

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

12 - TAXES ON INCOME (Cont.)

taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting

purposes and the amounts used for income tax purposes.

Significant components of the Company’s deferred tax assets are as follows:

SCHEDULE OF DEFERRED TAX ASSETS

loss carryforwards

based compensation expense

in marketable securities

research and development expenses

temporary differences

deferred tax assets

deferred tax assets after valuation allowance

tax liabilities:

deferred tax liability

following table presents a reconciliation of the beginning and ending valuation allowance:

SCHEDULE OF RECONCILIATION OF VALUATION ALLOWANCE

at beginning of the year

in valuation allowance to the income statement

in valuation allowance due to exchange rate foreign currency translation differences

change in the valuation allowance

at end of the year

assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of

the deferred tax assets will not be realized.

ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which

temporary differences are deductible and net operating losses are utilized.

Based on consideration of these factors, the Company recorded

a valuation allowance to reduce deferred tax assets to the amount supported by future reversals of existing taxable temporary differences

at December 31, 2024 and 2023.

following presents the adjustment between the theoretical income tax benefit that would result from applying the U.S.

federal statutory

income tax rate to loss before income taxes amount and the reported income tax benefit included in the financial statements:

OF COMPONENTS OF INCOME TAX EXPENSES BENEFITS

before income taxes

income tax rate

“expected” income tax benefit

tax rate differences

rate differences

Nondeductible

in valuation allowance

entire income tax benefit is a deferred tax benefit.

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

13 - SHAREHOLDERS’ EQUITY

stock confers upon their holders the right to receive notice to participate and vote in general

meetings of the Company, and the right to receive dividends if declared.

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, 2024.

Upon the effectiveness

of 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.

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.

All the per-share data was adjusted to

give retroactive effect of 1:8 reverse stock split effected in April 2024.

August 24, 2023, the Company entered into an inducement offer letter agreement (the “2023 Inducement Letter”) with a

certain holder of certain of the Company’s existing warrants to purchase up to (i) 1,963,994

shares of the Company’s common stock issued on January 12, 2023 at an exercise price of $ 2.805

per share (the “January 2023 Warrants”), (ii) 6,864

shares of the Company’s common stock issued on January 17, 2020 at an exercise price of $ 94.00

per share (the “January 2020 Warrants”), and (ii) 47,153

shares of the Company’s common stock issued on October 28, 2021 at an exercise price of $ 31.50

per share, having terms ranging from 28 months to five and one-half years (the “October 2021 Warrants” and together with

the January 2023 Warrants and the January 2020 Warrants, the “2023 Existing Warrants).

Pursuant to the 2023 Inducement Letter,

the holder agreed to exercise for cash its 2023 Existing Warrants to purchase an aggregate of 2,018,012

shares of the Company’s common stock at a reduced exercise price of $ 2.09

per share in consideration of the Company’s agreement to issue new common stock purchase warrants to purchase up to an

aggregate of 5,367,912

shares of the Company’s common stock at an exercise price of $ 2.09

The Company received aggregate gross proceeds of approximately $ 4.2

million from the exercise of the 2023 Existing Warrants by the holder, before deducting placement agent fees and other offering

expenses payable by the Company.

The net proceeds were approximately $ 3.6

As of December 31, 2024, the Company issued to the holder all of the exercised shares.

May 16, 2024, the Company entered into an inducement offer letter agreement (the “2024 Inducement Letter”) with a

certain 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

per share, ((i) and (ii) collectively, the “ 2024 Existing Warrants).

to the 2024 Inducement Letter, the holder agreed to exercise for cash its 2024 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 to purchase up to an

aggregate of 1,341,978

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

The Company received aggregate gross proceeds of approximately $ 3.26

million from the exercise of the 2024 Existing Warrants by the Holder, before deducting placement agent fees and other offering

expenses payable by the Company.

As of December 31, 2024, the Company issued to the holder all of the shares exercised.

December 27, 2024, the holder exercised warrants to purchase 653,028 shares of common stock of the Company resulting in gross proceeds

of approximately $ 3.0 million.

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

13 - SHAREHOLDERS’ EQUITY (Cont.)

summary of the warrant activity during the years ended December 31, 2024 and 2023 is presented below:

OF WARRANT ACTIVITY

December 31, 2022

December 31, 2023

( 1,328,639 )

December 31, 2024

14 - STOCK BASED COMPENSATION

stock-based expense recognized in the financial statements for services received is related to cost of goods, research and

development, sales and marketing and general and administrative expenses as shown in the following table:

OF STOCK BASED COMPENSATION EXPENSES

compensation expense – Cost of goods

compensation expense - Research and development

compensation expense - Sales and marketing

compensation expense - General and administrative

Stock-based compensation

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

14 - STOCK BASED COMPENSATION (Cont.)

issued to consultants

March 2023, the Company entered into a two-year agreement with a consultant to provide services to the Company including assisting

the Company to promote, market and sell the Company’s technology to potential customers.

Pursuant to such agreement and in

partial consideration for such consulting services, the Company agreed to issue to the consultant options to purchase up to 500 shares

of the Company’s common stock upon execution of the agreement.

The options are exercisable at $ 24.00

per share and shall vest in two equal instalments every twelve months starting March 2023.

Unexercised options shall expire 3 years

from the effective date.

July 2023, the Company entered into a six month agreement with a 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

Pursuant to the 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.

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

the year ended December 31, 2024, the Company recorded $ 71 , as stock-based equity awards with respect to the consultant.

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

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

14 - STOCK BASED COMPENSATION (Cont.)

Company’s outstanding options granted to consultants as of December 31, 2024 are as follows:

OF OPTIONS GRANTED TO CONSULTANTS

exercise price

September-October

Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.

fair value of the Company’s stock options granted to non-employees was calculated using the following weighted average assumptions:

OF FAIR VALUE ASSUMPTIONS OF STOCK OPTIONS

term of up to (years)

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

14 - STOCK BASED COMPENSATION (Cont.)

Option Plan for employees

March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors

may grant stock options to officers and key employees.

The total number of options which may be granted to directors, officers, employees

under this plan, is limited to 36,125 options.

Stock options can be granted with an exercise price equal to or less than the stock’s

fair market value at the date of grant.

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

assumptions in the following table.

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

Treasury yield curve

in effect at the time of grant.

OF FAIR VALUE ASSUMPTIONS OF STOCK OPTIONS

the years ended December 31, 2024 and 2023, 6,875 and 11,625 options, respectively, were granted.

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 share 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 vest in three equal instalments 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.

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

14 - STOCK BASED COMPENSATION (Cont.)

total stock option compensation expense in the year ended December 31, 2024 amounted to $ 390 as follows:

research and development expenses

amounted to $ 59 , sales and marketing expenses amounted to $ 46 and general and administrative expenses amounted to $ 285 .

total stock option compensation expense in the year ended December 31, 2023 amounted to $ 371 as follows:

research and development expenses

amounted to $ 71 , sales and marketing expenses amounted to $ 130 and general and administrative expenses amounted to $ 168 .

of December 31, 2024, there was a total of $ 117 unrecognized compensation cost relating to non-vested share-based compensation arrangements.

That cost is expected to be recognized over a weighted-average period of 2.0 years.

option activity during 2024 is as follows:

OF SHARES OPTION ACTIVITY

option activity during 2023 is as follows:

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

15 - CONTINGENCIES AND COMMITMENTS

August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”)

in the Supreme Court of the State of New York, County of New York for breach of a Securities

Purchase Agreement in which it sought 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 alleged

damages in an amount of $ 11,400 arising from an alleged breach of the Agreement.

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 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 counterclaims.

November 15, 2018, the Company’s CEO and former Chairman of the Board filed a motion

to dismiss North Empire’s third-party complaint.

On January 6, 2020, the Court granted

the motion and dismissed the third-party complaint.

Discovery has been completed and both

parties 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.

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.

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.

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

parties agreed on settlement terms, including a global settlement with a third party with related claims.

On November 19, 2024, the

settlement agreement was executed and on December 2, 2024, the parties filed the Stipulation of Discontinuance with the Court and

the action was dismissed.

Company did not recognize any a loss or expenses from the settlement agreement.

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.

Company filed its statement of defense in September 2024.

At this preliminary stage, the plaintiff did not provide sufficient

documents to support his claims regarding the extent of the alleged damage.

The Company and the plaintiff agreed to go to mediation

and are waiting for a suitable date to be set.

The Company cannot

evaluate the chances of the mediation or the claim to succeed.

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

16 – Operating Segments

Company reports its financial results for the two reportable

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

The Company chief executive officer who is the Chief Operating Decision Maker (“CODM”) reviews, accompanied

by disaggregated information about revenues and contributed profit by the two identified reportable segments.

The fashion and

equipment e-commerce platform which represents Orgad’s activity that was acquired by the Company in 2022, mainly operates on

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.

The Company operating segments are the same as its reportable segments.

C ODM reviews total operating expenses and consolidated

net loss to assess performance, forecast future financial results and allocate resources.

In assessing the Company’s financial

performance and making strategic decisions, the C ODM

regularly reviews segment loss and operating expenses by function.

This includes a review of budget versus actual expenses and cost of

goods, sales and marketing salaries and other segment expenses.

For the fashion and equipment e-commerce platform operating segment

the CODM also reviews gross profit and Amazon fees.

For the SaaS Solutions operating segment, the CODM also reviews research and development

costs of goods and other costs and expenses are generally directly attributed to the segments.

These expenses include research

and development related expenses, costs of Amazon fees, cost of goods, and legal-related costs.

Indirect costs are allocated to segments

based on a reasonable allocation methodology, when such costs are significant to the performance measures of the operating segments.

Indirect operating expenses, such as insurance, legal and audit services, mostly allocated based on revenues, most of which is allocated

to the fashion and equipment e-commerce platform segment.

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

OF REPORTABLE OPERATING SEGMENTS

and equipment

of the year ended December 31, 2024

from external customers

Cost of revenues

Research and development expenses

Sales and marketing Salaries

Impairment of goodwill

Other Segment Items (*)

Reconciliation of Profit or Loss

Financial income (expense), net

Loss before income taxes

non-cash items:

Other Income ( *** )

of goodwill (**)

Share based payments

segments items include shared based payments, rent and related expenses, professional services, insurance and other expenses.

See Note 2 0 .

and equipment

of December 31, 2024:

and equipment

of the year ended December 31, 2023

from external customers

Cost of revenues

Research and development expenses

Sales and marketing Salaries

Impairment of goodwill

Other Segment Items (*)

Reconciliation of Profit or Loss

income (expense), net

Equity loss of equity method investees

Loss before income taxes

non-cash items:

of goodwill (**)

Share based payments

Other segments items include shared based payments, rent and related expenses, professional services, insurance

and other expenses.

and equipment

of December 31, 2023:

Company elected to present geographic information in respect with revenues generated from external customers based on the selling location.

assets, which includes investment in JV, property, plant and equipment and right of use assets, by geographic region are as follows:

SCHEDULE OF CONSOLIDATED ASSETS

the year ended December 31, 2024, 91.64 % 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.

the year ended December 31, 2023, 86.45 % 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 CONSOLIDATED FINANCIAL STATEMENTS

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

17 - SALES AND MARKETING

OF SALES AND MARKETING

Consultants and subcontractors

Cash and equity liability expenses related

to Orgad acquisition

Share based payments for consultants and employees

Sales and marketing expenses

18 - GENERAL AND ADMINISTRATIVE EXPENSES

OF GENERAL AND ADMINISTRATIVE EXPENSES

based payments for consultants, directors and employees

office expenses and communication

liability and equity liability expenses related to Orgad acquisition (*)

liability expenses related to Naiz acquisition (*)

General and administrative

19 - FINANCIAL INCOME (EXPENSE), NET

OF FINANCIAL INCOME (EXPENSES), NET

rate differences

Financial income

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

19 - FINANCIAL INCOME (EXPENSE), NET (Cont.)

rate differences

of loan granted

investment in marketable securities

Financial expense

20 – SIGNIFICANT EVENTS DURING THE REPORTING PERIOD

On February 7,

2022, the Company acquired 100 %

of the shares and voting interests in Orgad an omnichannel e-commerce platform.

The Company agreed to pay to the former owners of

Orgad cash consideration of $ 300

and issuance of shares of common stock.

In addition, the

Company agreed to pay to the former owners of Orgad on the two-year and the three-year anniversary of the closing of the transaction

pursuant to which the Company acquired 100 %

of the shares and voting interests in Orgad, $ 350

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

further to certain downward post-closing adjustment.

In February 2024, the amount of $ 700

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

which was recorded as other income.

Towards the end of 2023, the Company negotiated with the sellers to reduce the amounts owed to them, based on the fact that the actual

working capital was different from that reflected in the financial statements attached to the contract.

The gaps were mainly from provision

for customer returns and value of the inventory.

In a settlement agreement between the parties signed on February 2024, it was determined

that the sellers would waive an amount of $ 275 .

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.

21 - EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE

On January 21,

2025, the Company entered into an At The Market Offering Agreement (the “Offering Agreement”), with H.C.

Wainwright & Co., LLC, pursuant to which the

Company may offer and sell, from time to time through Wainwright shares of the Company’s common stock having an aggregate

offering price of up to $ 4.1

The Company is not obligated to make any sales

of the shares under the Offering Agreement.

The offering of shares pursuant to the Offering Agreement will terminate upon the earliest

of (a) the sale of all of the shares subject to the Offering Agreement and (b) the termination of the Offering Agreement by Wainwright

or the Company, as permitted therein.

The Company agreed to pay to Wainwright a cash commission of 3 % of the gross sales price of any Common Stock sold under

the Offering Agreement and has agreed to provide.

As of March 10, 2025, the Company

shares pursuant to the Offering Agreement for aggregate gross proceeds of approximately $ 142 .

financial statements and the notes thereto begin on page F-1 of this Annual Report.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE

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What changed 10-K

Item 8. Financial Statements and Supplementary Data