What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-13 compared with 2026-05-14 · 122 added, 72 removed, 177 unchanged (52% of the section changed)

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related to our ability to continue as a going concern;

ability to remain listed on Nasdaq;

new and unproven nature of the measurement technology markets;

ability to achieve customer adoption of our products;

ability to realize the benefits of our acquisitions of Orgad, Naiz, the Percentil production unit and ShoeSize.Me;

ability to realize the benefits of our acquisitions of Orgad, Naiz, the Percentil production

unit and ShoeSize.Me;

ability to enhance our brand and increase market awareness;

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dollar translations of NIS amounts presented in this Quarterly Report on

Form 10-Q for three months ended on March 31, 2026 are translated using the rate of NIS 3.165 to $1.00.

Form 10-Q for six months ended on June 30, 2026 are translated using the rate of NIS 2.978 to $1.00.

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

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

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.

by us on August 12, 2026 with the shares beginning trading on a post-split basis on the Nasdaq Capital Market on August 13, 2026.

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

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

is to build an integrated fashion platform—the infrastructure layer that enables fashion brands to address four critical pain points

simultaneously:

Naiz Fit, our technology

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

footwear sizing solution we acquired in September 2025;

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

principally as a third-party seller on Amazon;

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

and Central Europe;

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

brands in Israel.

strategy is to build an integrated fashion platform—the infrastructure layer that 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

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.

and international

growth ambitions that require local distribution expertise and relationships.

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

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

Three months ended

(dollars in thousands)

Cost of revenues

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General and administrative

Impairment of goodwill

Operating loss

Financial income (expenses), net

Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

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

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

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.

and Three Months Ended June 30, 2026 Compared to Six and Three Months Ended June 30, 2025

revenues for the six months ended June 30, 2026 amounted to $5,464,000 compared to $3,485,000 for the six months ended June 30, 2025.

The increase in the six months ended June 30, 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 ShoeSizeMe and Ten Peacks in the consolidated report.

revenues for the three months ended June 30, 2026 amounted to $3,070,000 compared to $2,006,000 for the three months ended June 30,

The increase in the three months ended June 30, 2025 from the corresponding period is primarily attributable to Amazon sales

as well as inclusion of revenue generated by ShoeSizeMe and Ten Peacks in the consolidated report.

cost of revenues expenses for the six months ended June 30, 2026 amounted to $3,551,000 compared to $1,941,000 for the six months ended

June 30, 2025.

The increase in comparison with the corresponding period was mainly due to increase in amounts sold in Orgad and Rotrade

as well as the inclusion of ShoeSizeMe and Ten peacks in the consolidated report.

cost of revenues expenses for the three months ended June 30, 2026 amounted to $2,097,000 compared to $882,000 for the three months ended

June 30, 2025.

The increase is consistent with the increase in sales in addition to the inclusion of ShoeSizeMe and Ten Peacks in the

consolidated report.

and Development Expenses

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.

research and development expenses for the six months ended June 30, 2026 amounted to $614,000 compared to $224,000 for the six months

ended June 30, 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.

research and development expenses for the three months ended June 30, 2026 amounted to $375,000 compared to $142,000 for the three months

ended June 30, 2025.

The increase reflects continued investment in product development, AI capabilities and a larger engineering team

supporting the expanded platform in Naiz Fit.

and Marketing Expenses

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

sales and marketing expenses for the six months ended June 30, 2026 amounted to $2,025,000 compared to $1,087,000 for the six months

ended June 30, 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 sales and marketing expenses in the consolidated report.

sales and marketing expenses for the three months ended June 30, 2026 amounted to $1,135,000 compared to $520,000 for the three months

ended June 30, 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 sales and marketing expenses in the consolidated report.

and Administrative Expenses

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.

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.

general and administrative expenses for the six months ended June 30, 2026 amounted to $2,402,000 compared to $1,735,000 for the six

months ended June 30, 2025.

The increase was attributable to the increased in consulting expenses for investor relations as well as the

as the inclusion of ShoeSizeMe and Ten Peacks ‘ general and administrative expenses in the consolidated report.

general and administrative expenses for the three months ended June 30, 2026 amounted to $1,185,000 compared to $904,000 for the three

months ended June 30, 2025.

The increase was attributable to the inclusion of ShoeSizeMe and Ten Peacks ‘ general and administrative

expenses in the consolidated report.

a result of the foregoing, for the six months ended June 30, 2026, our operating loss was $3,128,000 an increase of $1,482,000, or 90%,

compared to our operating loss for the six months ended June 30, 2025 of $1,646,000

a result of the foregoing, for the three months ended June 30, 2026, our operating loss was $1,722,000 an increase of $1,136,000, or

194%, compared to our operating loss for the three months ended June 30, 2025 of $586,000.

Income (Expenses), Net

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.

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.

financial expense for the six months ended June 30, 2026 was $100,000 as compared to the financial

income of $136,000 for the six months ended June 30, 2025.

financial expense for the three months ended June 30, 2026 was $30,000 as compared to the financial income

reported for the three months ended June 30, 2025 of $136,000.

a result of the foregoing, our net loss for the six months ended June 30, 2026 was $3,228,000, compared to net loss of $1,510,000 for

the six months ended June 30, 2025.

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

a result of the foregoing, our net loss for the three months ended June 30, 2026 was $1,752,000 compared to net loss of $450,000 for

the three months ended June 30, 2025.

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

and Capital Resources

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of Israel and in the United States

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

of June 30, 2026, we had cash, cash equivalents and restricted cash of $711,000 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

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

that were deployed to grow our businesses and payments.

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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.

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.

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.

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.

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

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.

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 the date hereof, we sold 344,047

shares pursuant to the Offering Agreement for aggregate gross

proceeds of approximately $3.9 million.

On August 5, 2026, we entered

into an Equity Purchase Agreement with an investor, pursuant to which, subject to the satisfaction of the conditions set forth therein,

we have the right, but not the obligation, to sell to the investor, and the investor is obligated to purchase, up to $10.0 million of

our common stock over a 36-month period.

Purchases under the facility may be made from time to time at our discretion through the delivery

of purchase notices, subject to certain conditions, limitations and the terms of the Equity Purchase Agreement.

The purchase price for

shares sold under the Equity Purchase Agreement will be determined pursuant to a formula based on the market price of our common stock

during specified valuation periods.

In consideration for the facility, we issued 269,229 shares of common stock to the investor as a commitment

In connection with the Equity Purchase Agreement, we filed a registration statement covering the resale of up to 3,252,404 shares

of common stock, consisting of the 3,125,000 shares that may be sold under the facility and the 127,404 commitment shares.

cash used in operating activities amounted to $2,044,000 for the six months ended June 30, 2026, compared to $2,306,000 for the

six months ended June 30, 2025.

The reduction in operating cash outflows was primarily driven by favorable working capital movements,

including reductions in inventory, accounts receivable, and other receivables and prepaid expenses.

These positive changes were partially

offset by the payment of outstanding trade payables and an increase in our net loss during the period.

used in investing activities amounted to $47,000 for the six months ended June 30, 2026 compared to $54,000 cash used for the six months

ended June 30, 2025.

Investing cash outflows in both periods were primarily related to purchase of property and equipment, with the lower

cash outflow for the six months ended June 30, 2026 reflecting reduced capital expenditures compared to the prior-year period.

Net cash provided by financing activities was $244,000 for the six months

ended June 30, 2026, compared to $1,890,000 for the six months ended June 30, 2025.

Cash provided by financing activities during the six

months ended June 30, 2026 primarily consisted of $400,000 in loan proceeds and $190,000 of proceeds from the issuance of common shares

under ATM, partially offset by $346,000 in loan repayments.

The decrease in cash provided by financing activities compared to the prior-year

period was primarily attributable to lower proceeds from financing transactions during the current period.

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

Based on the projected

cash flows and cash balances as of 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 our ability to continue as a going concern.

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis