My Size, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis provides information that we believe to be relevant to an assessment and understanding of our results of operations and financial condition for the periods described. This discussion should be read together with our condensed consolidated interim financial statements and the notes to the financial statements, which are included in this Quarterly Report on Form 10-Q. This information should also be read in conjunction with the information contained in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission, or the SEC on April 15, 2026, or the Annual Report, including the consolidated annual financial statements as of December 31, 2025 and their accompanying notes included therein. This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended or the Exchange Act. Any statements in this Quarterly Report on Form 10-Q about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and are forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as “believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumed future results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future management and organizational structure are all forward-looking statements. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement. Any forward-looking statements are qualified in their entirety by reference to the risk factors discussed throughout this Quarterly Report on Form 10-Q. Some of the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include but are not limited to: ● our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all; ● risks related to our ability to continue as a going concern; ● the new and unproven nature of the measurement technology markets; ● our ability to achieve customer adoption of our products; ● our ability to realize the benefits of our acquisitions of Orgad, Naiz, the Percentil production unit and ShoeSize.Me; ● our ability to enhance our brand and increase market awareness; ● our ability to introduce new products and continually enhance our product offerings; ● the success of our strategic relationships with third parties; ● information technology system failures or breaches of our network security; ● competition from competitors; ● our reliance on key members of our management team; ● current or future litigation; ● current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk ● changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements and the impact of such policies on us, our customers and suppliers, and the global economic environment; and ● the impact of the political and security situation in Israel on our business. 14 The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forward-looking statements. You should read this Quarterly Report on Form 10-Q and the documents that we reference herein and have filed as exhibits to the Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the information appearing in this Quarterly Report on Form 10-Q is accurate as of the date hereof. Because the risk factors referred to on page 18 of our Annual Report, could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of the information presented in this Quarterly Report on Form 10-Q, and particularly our forward-looking statements, by these cautionary statements. Unless the context otherwise requires, all references to “we,” “us,” “our” or “the Company” in this Quarterly Report on Form 10-Q are to MySize, Inc., a Delaware corporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, Naiz Bespoke Technologies, S.L, or Naiz Fit, New Percentil S.L. or “New Percentil, ShoeSize.Me AG o r ShoeSizeMe and Ten Peacks Ltd. Or Ten Peacks taken as a whole. References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwise indicated, U.S. dollar translations of NIS amounts presented in this Quarterly Report on Form 10-Q for three months ended on March 31, 2026 are translated using the rate of NIS 3.165 to $1.00. All information in this Quarterly Report on Form 10-Q relating to shares or price per share reflects the 1-for-8 reverse stock split effected by us on April 19, 2024 with the shares beginning trading on a post-split basis on the Nasdaq Capital Market on April 23, 2024. Overview We 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. Our strategy is to build an integrated fashion platform—the infrastructure layer that enables 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 solutions; 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 is designed to allow 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. Macroeconomic and Geopolitical Environment Because we operate globally, our business is subject to the effects of economic downturns or recessions in the regions in which we do business, volatility in foreign currency exchange rates relative to the U.S. dollar, inflation, changing interest rates, expanded trade control laws and regulations, imposition of new or higher tariffs and geopolitical conflicts. In addition, U.S. President Trump has made a series of announcements regarding the imposition of new and higher U.S. tariffs on imports from many countries. In response, certain countries, as well as the European Union, have announced retaliatory tariffs on imports of U.S. goods and other countermeasures. We are monitoring these actions, including any pauses, escalations, exemptions or removal of exemptions, with respect to the threatened or imposed tariffs, and will continue to assess their potential impact on our business either directly, such as on our hardware business, or due to downstream effects. We also continuously monitor geopolitical conflicts around the world, including the ongoing conflict between Russia and Ukraine and conflicts in the Middle East, and assess their impact on our business. To date, these conflicts have not materially limited our ability to develop or support our products and have not had a material impact on our results of operations, financial condition, liquidity or cash flows. While our business model provides some resilience against these factors, we will continue to monitor the direct and indirect impacts of these or similar circumstances on our business and financial results. For additional information on the potential impact of macroeconomic and geopolitical conditions on our business, see the “Risk Factors” section in our Annual Report. 15 Results of Operations The table below provides our results of operations for the periods indicated. Three months ended March 31, 2026 2025 (dollars in thousands) Revenues $ 2,394 $ 1,479 Cost of revenues (1,454 ) (1,059 ) Gross profit 940 420 Research and development expenses (239 ) (82 ) Sales and marketing (890 ) (567 ) General and administrative (1,217 ) (831 ) Operating loss (1,406 ) (1,060 ) Financial income (expenses), net (70 ) - Net loss $ (1,476 ) $ (1,060 ) Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025 Revenues Our revenues for the three months ended March 31, 2026 amounted to $2,394,000 compared to $1,479,000 for the three months ended March 31, 2025. The increase in the three months ended March 31, 2026 from the corresponding period is primarily attributable to an increase in fashion e-commerce platform as well as well as the inclusion of revenue generated by Percentil in the consolidated report. Cost of Revenues Our cost of revenues expenses for the three months ended March 31, 2026 amounted to $1,454,000 compared to $1,059,000 for the three months ended March 31, 2025. The increase in comparison with the corresponding period was mainly due to increase in amounts sold in Orgad and Rotrade. Research and Development Expenses Our research and development expenses for the three months ended March 31, 2026 amounted to $239,000 compared to $82,000 for the three months ended March 31, 2025. The increase from the corresponding period was mainly due to an increase in salaries expenses due to increased headcount and an increase in subcontractor expenses to align with our strategy to invest heavily in innovation. Sales and Marketing Expenses Our sales and marketing expenses for the three months ended March 31, 2026 amounted to $890,000 compared to $567,000 for the three months ended March 31, 2025. The increase primarily resulted from an increase in Amazon fees due to the increase in sales in Orgad and Rotrade as well as the inclusion of Percentil’s sales and marketing expenses in the consolidated report. General and Administrative Expenses Our general and administrative expenses for the three months ended March 31, 2026 amounted to $1,217,000 compared to $831,000 for the three months ended March 31, 2025. The increase was attributable to the increased in consulting expenses for investor relations as well as the as the inclusion of Percentil’s general and administrative expenses in the consolidated report. Operating Loss As a result of the foregoing, for the three months ended March 31, 2026, our operating loss was $1,406,000 an increase of $320,000, or 33%, compared to our operating loss for the three months ended March 31, 2025 of $1,060,000. Financial Income (Expenses), Net Our financial expenses for the three months ended March 31, 2026 $70,000 compared to financial income of $182 for the three months ended March 31, 2025. Net Loss As a result of the foregoing, our net loss for the three months ended March 31, 2026 was $1,476,000, compared to net loss of $1,060,000 for the three months ended March 31, 2025. The increase in net loss was mainly due to the reasons mentioned above. 16 Liquidity and Capital Resources Since our inception, we have funded our operations primarily through public and private offerings of debt and equity securities in the State of Israel and in the United States As of March 31, 2026, we had cash, cash equivalents and restricted cash of $910,000 compared to $2,557,000 of cash, cash equivalents and restricted cash as of December 31, 2025. This decrease primarily resulted from offset by payments that were made to suppliers, resources that were deployed to grow our businesses and payments. In January 2025, we entered into an At The Market Offering Agreement, or the Offering Agreement with H.C. Wainwright & Co., LLC, as agent, or 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. As of March 31, 2026 and the date hereof, we sold 2,011,912 pursuant to the Offering Agreement for aggregate gross proceeds of approximately $3.6 million. Cash used in operating activities amounted to $2,069,000 for the three months ended March 31, 2026, compared to $1,268,000 for the three months ended March 31, 2025. The increase in cash used in operating activity is derived mainly from increase in the net loss offset by a change in inventory and account receivables. Cash used in investing activities amounted to $46,000 for the three months ended March 31, 2026 while there was no cash used or provided both for the three months ended March 31, 2025. The cash used to purchase property and equipment. Net cash provided by financing activities was $453,000 for the three months ended March 31, 2026, compared to $95,000 for the three months ended March 31, 2025. The cash flow from financing activities for the three months ended March 31, 2026 resulted from loan proceeds and the issuance of shares during the period. We expect that the we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flows and cash balances as of 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 12 months. As a result, there is substantial doubt about the Company’s 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: ● finance our current operating expenses; ● pursue growth opportunities; ● hire and retain qualified management and key employees; ● respond to competitive pressures; ● comply with regulatory requirements; and ● maintain compliance with applicable laws. Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only on unfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, 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. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result in substantial dilution for our current stockholders. The terms of any securities issued by us in future capital-raising transactions may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders of any of our securities then-outstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for our common stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capital-raising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be available on terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities and growth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect on our business, results of operations and financial condition. We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support. 17 Critical Accounting Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statements included herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and future performance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to be critical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time we were making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations. Item 3. Quantitative and Qualitative Disclosure About Market Risk. Not required for a smaller reporting company.