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Item 2. Management’s Discussion and Analysis

2025-05-15 compared with 2024-11-14 · 245 added, 272 removed, 40 unchanged (93% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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.

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

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

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

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.

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.

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:

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, 2024, filed with the Securities

and Exchange Commission, or the SEC on March 27, 2025, or the Annual Report, including the consolidated annual financial statements as

of December 31, 2024 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.

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:

history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable

14 unchanged sentences

liquidity risk

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

impact of the political and security situation in Israel on our business.

foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forward-looking

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

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

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

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.

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

My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L, or Naiz Fit, taken as a whole.

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.

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.

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

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, and Naiz Bespoke Technologies, S.L, or Naiz Fit, taken as a whole.

dollars” and “$” are to currency of the United States of America, and references to “NIS”

2 unchanged sentences

dollar translations of NIS amounts presented in this Quarterly Report on

Form 10-Q for three months ended on September 30, 2024 are translated using the rate of NIS 3.710 to $1.00.

Form 10-Q for three months ended on March 31, 2025 are translated using the rate of NIS 3.718 to $1.00.

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

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

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

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

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

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

Our advanced software and solutions assist us in

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

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

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

a simple questionnaire which uses a database

collected over the years.

syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application,

and only presents items for purchase that match their measurements to ensure a correct fit.

are positioning ourselves as a consolidator of sizing solutions and a provider of a new digital experience due to recent technological

developments for the fashion industry needs.

Our other product offerings include First Look Smart Mirror for physical stores and Smart

Catalog to empower brand design teams, which are designed to increase end consumer satisfaction, contributing to a sustainable world

and reducing operation costs.

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.

In addition, since the commencement of these events, there have been continued hostilities along Israel’s northern

border with Lebanon (with the Hezbollah terror organization) and on other fronts from various extremist groups in region, such as the Houthi

movement in Yemen and various rebel militia groups in Syria and Iraq.

Israel has carried out a number of targeted strikes on sites belonging

to these terror organizations and in October 2024, Israel began limited ground operations against Hezbollah in Lebanon.

In addition, Iran

recently launched direct attacks on Israel involving hundreds of drones and missiles and has threatened to continue to attack Israel

and is widely believed to be developing nuclear weapons.

Iran is also believed to have a strong influence among extremist groups in the

region, such as Hamas in Gaza, Hezbollah in Lebanon, the Houthi movement in Yemen and various rebel militia groups in Syria and Iraq.

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

To date, security situation in Israel has had an immaterial effect

on our operations and financial results.

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

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

of Operations

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

We are an omnichannel

e-commerce platform and provider of AI-driven SaaS measurement solutions and our recently acquired subsidiaries, Naiz Fit, which provides

SaaS technology solutions that solve size and fit issues and AI solutions for smarter design through data driven decisions for fashion

ecommerce companies, and Orgad, an online retailer operating in the global markets.

To date, we have generated almost all our revenue

as a third-party seller on Amazon.

Our advanced software and solutions assists us in supply chain, identifying products that can drive

growth and provides a user-friendly experience and best customer service.

We are currently focused

on driving the commercialization of the Naiz Fit technology which, enables shoppers to generate highly accurate measurements of their

body to find the accurate fitting apparel by using our Naiz Fit Widget, a simple questionnaire which uses a database collected over the

years and allows buyers to know what size to pick when buying online, reducing returns and increasing conversion rates of sellers.

Naiz Fit syncs the user’s

measurement data to a sizing model generated with our proprietary Garment Modelling technology for each item sold on the ecommerce, and

only presents items for purchase that match their measurements to ensure a correct fit.

We are positioning ourselves

as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs.

Our other product

offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase

end consumer satisfaction, contributing to a sustainable world and reduce operation costs.

We also recently launched True Feedback, a

Go-To-market solution that extracts data from our Naiz Community mystery shoppers to fine-tune the customer experience offered to fashion

buyers, both online and offline.

New Percentil

9, 2025, our newly-formed, wholly-owned subsidiary, New Percentil, S.L., a limited liability company incorporated under the laws of Spain,

or New Percentil, entered into a production unit transfer agreement, or the Production Transfer Agreement, with Casi Nuevo Kids, S.L.,

a limited liability company incorporated under the laws of Spain, or Casi Nuevo, pursuant to which New Percentil acquired, or the Acquisition,

a production unit of Casi Nuevo with a trade name of Percentil, or the Production Unit or Percentil, that was judicially awarded to us

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

13 of Madrid (Spain).

The Acquisition

was completed on May 9, 2025.

to the Production Transfer Agreement, New Percentil acquired the Production Unit, which consists of warehouse infrastructure and equipment,

including Percentil’s central warehouse, process and logistics equipment, including Percentil’s proprietary quality control

and picking systems, AI-powered pricing engine and proprietary garment assessment tools and processes, computer and electronic equipment,

including photographic equipment and content production, equipment for garments and product presentation, supplies and support equipment,

inventory and other equipment and tools.

In addition, pursuant to the Production Transfer Agreement, New Percentil was subrogated exclusively

in the position of Casi Nuevo in the labor contracts of 17 former employees of Casi Nuevo, including its chief executive officer and chief

marketing officer, who have transferred to New Percentil in connection with the Acquisition, or the Percentil Employees.

purchase price of the Acquisition was €610,806.81 (approximately $679,000), which consists of (i) €40,000 (approximately $44,500)

paid by Naiz Fit, (ii) €358,196 (approximately $398,000) for the assumption of certain liabilities owed by Casi Nuevo to its customers,

(iii) €48,000 (approximately $53,500) for the assumption of certain debt and social security payments related to the Percentil Employees,

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

The Production

Unit’s assets that were acquired by New Percentil in connection with the Acquisition were acquired free of liens, encumbrances,

attachments or third party rights.

Macroeconomic and Geopolitical Environment

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.

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.

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.

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.

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.

Results of Operations

The table below provides our results

of operations for the periods indicated.

Three months ended

September 30,

Nine months ended

September 30,

(dollars in thousands)

Cost of revenues

2 unchanged sentences

General and administrative

Impairment of goodwill

Operating loss

Financial income (expenses), net

Equity accounted losses

and Three Months Ended September 30, 2024 Compared to Nine and Three Months Ended September 30, 2023

revenues for the nine months ended September 30, 2024 amounted to $6,802,000 compared to $4,166,000 for the nine months ended September

The increase in the nine months ended September 30, 2024 from the corresponding period is primarily attributable to an increase

in Orgad sales due to the fire occurred in the warehouse in January 2023.

revenues for the three months ended September 30, 2024 amounted to $1,839,000 compared to $2,156,000 for the three months ended September

The decrease in the three months ended September 30, 2024 from the corresponding period is primarily attributable to a decrease

in Orgad sales due to low inventory and seasonality.

cost of revenues expenses for the nine months ended September 30, 2024 amounted to $3,831,000 compared to $2,698,000 for the nine months

ended September 30, 2023.

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

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

cost of revenues expenses for the three months ended September 30, 2024 amounted to $1,048,000 compared to $780,000 for the three months

ended September 30, 2023.

The increase in comparison with the corresponding period was mainly due to an increase in shipping costs and

cost of goods.

and Development Expenses

research and development expenses for the nine months ended September 30, 2024 amounted to $352,000 compared to $811,000 for the nine

months ended September 30, 2023.

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

reduced headcount and a decrease in subcontractor expenses.

research and development expenses for the three months ended September 30, 2024 amounted to $89,000 compared to $242,000 for the three

months ended September 30, 2023.

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

reduced headcount and a decrease in subcontractor expenses.

and Marketing Expenses

sales and marketing expenses for the nine months ended September 30, 2024 amounted to $2,670,000 compared to $2,598,000 for the nine

months ended September 30, 2023.

The increase primarily resulted from an increase in Amazon fees due to an increase in sales offset

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

sales and marketing expenses for the three months ended September 30, 2024 amounted to $737,000 compared to $952,000 for the three months

ended September 30, 2023.

The decrease primarily resulted from a decrease in salary expenses due to reduced headcount, consultant expenses,

travel and marketing expenses offset by an increase in Amazon fees due to the increase in sales.

and Administrative Expenses

general and administrative expenses for the nine months ended September 30, 2024 amounted to $2,572,000 compared to $3,210,000 for the

nine months ended September 30, 2023.

The decrease primarily resulted from a decrease in professional services and insurance expenses.

general and administrative expenses for the three months ended September 30, 2024 amounted to $640,000 compared to $1,287,000 for the

three months ended September 30, 2023.

The decrease primarily resulted from a decrease in professional services and insurance expenses.

We recorded a

goodwill impairment charge of $631,000 for the three months ended September 30, 2024 as the carrying value of SaaS Solution reporting segment exceeded its expected fair value.

No impairment

was recorded for the three months ended September 30, 2023.

a result of the foregoing, for the nine months ended September 30, 2024, our operating loss was $3,254,000 a decrease of $1,897,000, or

36.8%, compared to our operating loss for the nine months ended September 30, 2023 of $5,151,000.

a result of the foregoing, for the three months ended September 30, 2024, our operating loss was $1,306,000 an increase of $201,000, or

18.2%, compared to our operating loss for the three months ended September 30, 2023 of $1,105,000.

Income (Expenses), Net

financial expenses, net for the nine months ended September 30, 2024 amounted to $26,000 compared to financial expenses of $78,000 for

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

expenses exchange rate differences.

financial income, net for the three months ended September 30, 2024 amounted to $6,000 compared to financial income of $22,000 for the

three months ended September 30, 2023.

The decrease compared to the corresponding period was mainly due to a decrease in financial expenses

exchange rate differences.

a result of the foregoing, our net loss for the nine months ended September 30, 2024 was $3,280,000, compared to net loss of $5,077,000

for the nine months ended September 30, 2023.

Three Months Ended March 31, 2025 Compared to Three

Months Ended March 31, 2024

Our revenues for the three

months ended March 31, 2025 amounted to $1,479,000 compared to $2,984,000 for the three months ended March 31, 2024.

The decrease in the

three months ended March 31, 2025 from the corresponding period is primarily attributable to a decrease in Orgad sales.

Cost of Revenues

Our cost of revenues expenses

for the three months ended March 31, 2025 amounted to $1,059,000 compared to $1,788,000 for the three months ended March 31, 2024.

decrease in comparison with the corresponding period was mainly due to a decrease in amounts sold.

Research and Development Expenses

Our research and development

expenses for the three months ended March 31, 2025 amounted to $82,000 compared to $132,000 for the three months ended March 31, 2024.

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

subcontractor expenses.

Sales and Marketing Expenses

Our sales and marketing expenses

for the three months ended March 31, 2025 amounted to $567,000 compared to $1,102,000 for the three months ended March 31, 2024.

primarily resulted from a decrease in salary expenses due to reduced headcount, consultant expenses and marketing expenses decrease in Amazon fees due to the increase in sales.

General and Administrative Expenses

Our general and administrative

expenses for the three months ended March 31, 2025 amounted to $831,000 compared to $1,033,000 for the three months ended March 31, 2024.

The decrease primarily resulted from a decrease in professional services and stock based compensation.

Operating Loss

As a result of the foregoing,

for the three months ended March 31, 2025, our operating loss was $1,060,000 an increase of $11,000, or 1%, compared to our operating

loss for the three months ended March 31, 2024 of $1,071,000.

Financial Income (Expenses), Net

Our financial income (expenses),

net for the three months ended March 31, 2025 $0 compared to financial income of $55,000 for the three months ended March 31, 2024.

As a result of the foregoing,

our net loss for the three months ended March 31, 2025 was $1,060,000, compared to net loss of $1,016,000 for the three months ended March

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

a result of the foregoing, our net loss for the three months ended September 30, 2024 was $1,300,000, compared to net loss of $1,132,000

for the three months ended September 30, 2023.

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

and Capital Resources

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

of Israel and in the United States

of September 30, 2024, we had cash, cash equivalents and restricted cash of $2,371,000 compared to $2,264,000 of cash, cash equivalents

and restricted cash as of December 31, 2023.

This increase primarily resulted from the warrant repricing transaction that was completed

in May 2024, offset by payments that were made to suppliers, resources that were deployed to grow our businesses and payments related

to the Orgad acquisition.

used in operating activities amounted to $2,523,000 for the nine months ended September 30, 2024, compared to $4,910,000 for the nine

months ended September 30, 2023.

The decrease in cash used in operating activity is derived mainly from a change in inventory, impairment

of goodwill and a decrease in the net loss offset by a change in account receivables, trade payables and liabilities to related parties.

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

September 30, 2023.

cash provided by financing activities was $2,626,000 for the nine months ended September 30, 2024, compared to $6,230,000 for the

nine months ended September 30, 2023.

The cash flow from financing activities for the nine months ended September 30, 2024 resulted

from the May 2024 warrant repricing transaction and a loan that was received in February 2024 compared to the public and private

offerings that occurred in January and August 2023.

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

Based on the projected

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

of more than 12 months.

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

We will need to raise

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

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, 2025, we had

cash, cash equivalents and restricted cash of $3,695,000 compared to $4,880,000 of cash, cash equivalents and restricted cash as of December

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

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, 2025 and the date hereof, we sold 60,589 shares and 992,328 shares, respectively, pursuant

to the Offering Agreement for aggregate gross proceeds of approximately $142,000 and $1,995,000, respectively.

Cash used in operating activities

amounted to $1,268,000 for the three months ended March 31, 2025, compared to $1,417,000 for the three months ended March 31, 2024.

decrease in cash used in operating activity is derived mainly from a decrease in the net loss offset by a change in account receivables

and trade payables.

Net cash provided by investing

activities was none for the three months ended March 31, 2025, compared to $60,000 for the three months ended March 31, 2024.

Net cash provided by financing

activities was $95,000 for the three months ended March 31, 2025, compared to $407,000 for the three months ended March 31, 2024.

cash flow from financing activities for the three months ended March 31, 2025 resulted from the issuance of shares during the period.

We expect 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 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:

our current operating expenses;

growth opportunities;

and retain qualified management and key employees;

to competitive pressures;

with regulatory requirements;

compliance with applicable laws.

finance our current operating expenses;

pursue growth opportunities;

hire and retain qualified management and key employees;

respond to competitive pressures;

comply with regulatory requirements;

maintain compliance with applicable laws.

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

1 unchanged sentence

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.

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.

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

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

for capital-raising or other business purposes.

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

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

plans or the terms of such financings.

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

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

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

which may adversely impact our financial condition.

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

available on terms favorable to us, or at all.

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

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

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

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

conditions, the security situation in Israel, and a number of other factors, many of which are outside our control, and on our financial

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

acceptable to us.

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

operations and financial condition.

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.

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

Accounting Estimates

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

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.

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.

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

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.

impairment assessment

the fair value of our reporting units using the income approach.

According to the income, we use discounted cash flows to estimate the

Cash flow projections require us to make significant 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, adjusted for the relevant risk associated with business-specific characteristics.

Examples of critical estimates

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

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

We have experienced a pair of triggering events in the period ended September

30, 2024 due to sustained decreases in our share price and a decline in actual and forecasted operating results, prompting impairment

assessments of goodwill and long-lived assets, including definite-lived intangibles.

The table below indicates changes in the most significant inputs to our

impairment analysis on each testing date since its last annual test.

Discount rate

Testing dates

December 31, 2023

September 30, 2024

September 2024, we 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

multiples based upon an assessment of current market conditions.

As a result of this review, we did not identify an impairment to

its definite-lived intangible assets or other long-lived assets.

Based on our analysis, we determined that the carrying

value of our SaaS Solutions reporting unit exceeded its fair value and an impairment charge of $631,000 was recorded.

The analysis was done for the Fashion and equipment e-commerce platform reporting unit as well, but the reporting

value exceeds its carrying amount.

table below indicates changes in the most significant inputs to our impairment analysis on each testing date since its last annual test

for Fashion and equipment e-commerce platform segment.

Discount rate

Testing dates

December 31, 2023

September 30, 2024

September 2024, we 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.

As a result of this review, the Company did not identify an

impairment to its definite-lived intangible assets or other long-lived assets or for its goodwill for the quarter ended September

30, 2024 (level 3 fair value measurement).

Quantitative and Qualitative Disclosure About Market Risk.

required for a smaller reporting company.

(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.

Quantitative and Qualitative Disclosure

About Market Risk.

Not required for a smaller reporting

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