My Size, Inc. 10-Q

Item 1. Financial Statements. My Size, Inc. and Subsidiaries Condensed Consolidated Interim Financial Statements As of June 30, 2025 (unaudited) U.S. Dollars in Thousands 1 MY SIZE, INC. AND ITS SUBSIDIARIES Condensed Consolidated Interim Financial Statements as of June 30, 2025 (Unaudited) Contents Page Condensed Consolidated Interim Balance Sheets (Unaudited) 3 Condensed Consolidated Interim Statements of Comprehensive Loss (Unaudited) 4 Condensed Consolidated Interim Statements of Changes in Stockholders’ Equity (Unaudited) 5 Condensed Consolidated Interim Statements of Cash flows (Unaudited) 6 Notes to Condensed Consolidated Interim Financial Statements (Unaudited) 7-17 2 MY SIZE, INC. AND ITS SUBSIDIARIES Condensed Consolidated Interim Balance Sheets (Unaudited) U.S. dollars in thousands (except share data and per share data) June 30, December 31, 2025 2024 Assets Current Assets: Cash and cash equivalents 4,282 4,880 Inventory 2,901 2,796 Account receivables 398 278 Other receivables and prepaid expenses 832 1,118 Total current assets 8,413 9,072 Long term deposits - 7 Property and equipment, net 81 67 Operating right-of-use asset 17 23 Intangible assets 1,195 750 Goodwill 142 133 Investment in marketable securities 14 7 Total non-current assets 1,449 987 Total assets 9,862 10,059 Liabilities and stockholders’ equity Current liabilities: Operating lease liability 15 15 Short-term loans 80 107 Trade payables 914 2,084 Liabilities to related parties 54 151 Seller payable 346 - Other payables 752 639 Total current liabilities 2,161 2,996 Long-term loans 92 146 Operating lease liability 2 8 Other Non-Current Liabilities 193 - Total non-current liabilities 287 154 Commitments and contingencies - - Total liabilities 2,448 3,150 Stockholders’ equity: Stock Capital - Common stock of $ 0.001 par value - Authorized: 250,000,000 shares; Issued and outstanding: 3,103,076 and 2,040,159 as of June 30, 2025 and December 31, 2024, respectively 3 2 Additional paid-in capital 73,662 71,608 Accumulated other comprehensive loss ( 865 ) ( 825 ) Accumulated deficit ( 65,386 ) ( 63,876 ) Total stockholders’ equity 7,414 6,909 Total liabilities and stockholders’ equity 9,862 10,059 The accompanying notes are an integral part of the condensed consolidated interim financial statements. 3 MY SIZE, INC. AND ITS SUBSIDIARIES Condensed Consolidated Interim Statements of Comprehensive Loss (Unaudited) U.S. dollars in thousands (except share data and per share data) 2025 2024 2025 2024 Six-Months Ended June 30, Three-Months Ended June 30, 2025 2024 2025 2024 Revenues 3,485 4,963 2,006 1,979 Cost of revenues ( 1,941 ) ( 2,783 ) ( 882 ) ( 995 ) Gross profit 1,544 2,180 1,124 984 Operating expenses Research and development ( 224 ) ( 263 ) ( 142 ) ( 131 ) Sales and marketing ( 1,087 ) ( 1,933 ) ( 520 ) ( 831 ) General and administrative ( 1,735 ) ( 1,932 ) ( 904 ) ( 899 ) Impairment of goodwill ( 144 ) - ( 144 ) - Total operating expenses ( 3,190 ) ( 4,128 ) ( 1,710 ) ( 1,861 ) Operating loss ( 1,646 ) ( 1,948 ) ( 586 ) ( 877 ) Financial income (expenses), net 136 ( 32 ) 136 ( 87 ) Loss before taxes ( 1,510 ) ( 1,980 ) ( 450 ) ( 964 ) Taxes on income - - - - Net loss ( 1,510 ) ( 1,980 ) ( 450 ) ( 964 ) Other comprehensive income (loss): Foreign currency translation differences ( 40 ) ( 99 ) ( 61 ) 8 Total comprehensive loss ( 1,550 ) ( 2,079 ) ( 511 ) ( 956 ) Basic and diluted loss per share ( 0.58 ) ( 3.06 ) ( 0.15 ) ( 1.28 ) Basic and diluted weighted average number of shares outstanding 2,595,599 647,321 3,091,735 755,600 The accompanying notes are an integral part of the interim condensed consolidated financial statements. 4 MY SIZE, INC. AND ITS SUBSIDIARIES Condensed Consolidated Interim Statements of Changes in Stockholders’ Equity (Unaudited) U.S. dollars in thousands (except share data and per share data) Number Amount capital loss deficit equity Common stock Additional paid-in Accumulated other comprehensive Accumulated Total stockholders’ Number Amount capital loss deficit equity Balance as of January 1, 2025 2,040,159 2 71,608 ( 825 ) ( 63,876 ) 6,909 Stock-based compensation related to options granted to employees and consultants 10,000 - * 68 - - 68 Issuance of shares pursuant to At The Market Offering Agreement for - net of $ 215 issuance cost ** 1,052,917 1 1,986 - - 1,987 Issuance of shares pursuant to At The Market Offering Agreement for - net 1,052,917 1 1,986 - - 1,987 Total comprehensive loss - - - ( 40 ) ( 1,510 ) ( 1,550 ) Balance as of June 30, 2025 3,103,076 3 73,662 ( 865 ) ( 65,386 ) 7,414 (*) Represents an amount less than $1. (**) See note 9 Common stock Additional paid-in Accumulated other comprehensive Accumulated Total stockholders’ Number Amount capital loss deficit equity Balance as of January 1, 2024 452,724 1 65,386 ( 771 ) ( 59,881 ) 4,735 Stock-based compensation related to options granted to employees and consultants 80,000 - * 217 - - 217 Issuance of shares post Business Combination 4,360 - * 3 - - 3 Effect of reverse stock split 74,683 - * - - - - Issuance of shares, net of issuance cost of $ 442 79,000 - * 2,819 - - 2,819 Issuance of shares, net of issuance cost 79,000 - * 2,819 - - 2,819 Exercise of shares in abeyance 192,364 - * - - - - Total comprehensive loss - - - ( 99 ) ( 1,980 ) ( 2,079 ) Balance as of June 30, 2024 883,131 1 68,425 ( 870 ) ( 61,861 ) 5,695 (*) Represents an amount less than $1. Common stock Additional paid-in Accumulated other comprehensive Accumulated Total stockholders’ Number Amount capital loss deficit equity Balance as of April 1, 2025 2,110,748 2 71,767 ( 804 ) ( 64,936 ) 6,029 Stock-based compensation related to options granted to employees and consultants - - 46 - - 46 Issuance of shares pursuant to At The Market Offering Agreement for - net of $ 210 issuance cost ** 992,328 1 1,849 - - 1,850 Total comprehensive loss - - - ( 61 ) ( 450 ) ( 511 ) Balance as of June 30, 2025 3,103,076 3 73,662 ( 865 ) ( 65,386 ) 7,414 (**) See note 9 Common stock Additional paid-in Accumulated other comprehensive Accumulated Total stockholders’ Number Amount capital loss deficit equity Balance as of April 1, 2024 641,459 1 65,527 ( 878 ) ( 60,897 ) 3,753 Balance 641,459 1 65,527 ( 878 ) ( 60,897 ) 3,753 Stock-based compensation related to options granted to employees and consultants - - 79 - - 79 Effect of reverse stock split 74,683 - * - - - - Issuance of shares, net of issuance cost of $ 442 79,000 - * 2,819 - - 2,819 Issuance of shares, net of issuance cost 79,000 - * 2,819 - - 2,819 Exercise of warrants and prefunded warrants 87,989 - * - - - - Total comprehensive loss - - - 8 ( 964 ) ( 956 ) Balance as of June 30, 2024 883,131 1 68,425 ( 870 ) ( 61,861 ) 5,695 Balance 883,131 1 68,425 ( 870 ) ( 61,861 ) 5,695 (*) Represents an amount less than $1. 5 MY SIZE, INC. AND ITS SUBSIDIARIES Condensed Consolidated Interim Statements of Cash Flows (Unaudited) U.S. dollars in thousands 2025 2024 Six-Months Ended June 30, 2025 2024 Cash flows from operating activities: Net loss ( 1,510 ) ( 1,980 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 15 16 Change in operating lease right-of-use asset 5 138 Amortization of intangible assets 89 76 Impairment of goodwill 144 - Change in liabilities to related parties ( 97 ) ( 525 ) Interest on long-term liabilities - 41 Interest paid ( 5 ) ( 37 ) Revaluation of investment in marketable securities ( 7 ) ( 4 ) Stock based compensation 68 217 Change in inventory ( 9 ) 1,080 Change in account receivable ( 118 ) 282 Changes in operating lease liabilities ( 6 ) ( 97 ) Change in other receivables and prepaid expenses 286 38 Change in trade payables ( 1,170 ) ( 1,212 ) Changes in seller payables ( 55 ) - Change in other payables ( 250 ) ( 109 ) Change in Other Current Liabilities 314 - Net cash used in operating activities ( 2,306 ) ( 2,076 ) Cash flows from investing activities: Purchase of Percentil ( 45 ) - Proceeds from investment in JV - 38 Purchase of Property, Equipment & Intangibles ( 16 ) - Proceeds from short-term deposits 7 22 Net cash provided by investing activities ( 54 ) 60 Cash flows from financing activities: Proceeds from issuance of shares, net of issuance costs 1,987 2,819 Loans received - 500 Repayment of loans ( 97 ) ( 358 ) Net cash provided by financing activities 1,890 2,961 Effect of exchange rate fluctuations on cash and cash equivalents ( 128 ) 66 Increase (decrease) in cash, cash equivalents and restricted cash ( 598 ) 1,011 Cash, cash equivalents and restricted cash at the beginning of the period 4,880 2,264 Cash, cash equivalents and restricted cash at the end of the period 4,282 3,275 Noncash activities: Change in operating lease right-of-use asset and liability - 181 The accompanying notes are an integral part of the interim condensed consolidated financial statements. 6 MY SIZE, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Interim Financial Statements (Unaudited) U.S. dollars in thousands (except share data and per share data) Note 1 - General a. My Size, Inc. (the “Company”) 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. Following the acquisition of Naiz Fit Bespoke Technologies, S.L (“Naiz”) in October 2022, the Company expanded its offering outreach and customer base. Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022, the Company also operates an omnichannel e-commerce platform. Following the formation of a new subsidiary, New Percentil S.L., and acquisition of a new business unit in May 2025 (see note 6), the Company also operates a resale platform that enables consumers to buy and sell primarily secondhand apparel. The Company has seven 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 is incorporated in the Russian Federation, and two limited liability companies incorporated under the laws of Spain namely Naiz and Percentil. References to the Company include the subsidiaries unless the context indicates otherwise. My 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. On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. From September 1, 2005 to March 27, 2024, the Company’s common stock was traded on the Tel Aviv Stock Exchange. On May 9, 2025, a newly-formed, wholly-owned subsidiary of the Company, New Percentil, S.L., a limited liability company incorporated under the laws of Spain (“New Percentil”), entered into a production unit transfer agreement with Casi Nuevo Kids, S.L., a limited liability company incorporated under the laws of Spain (“Casi Nuevo”), pursuant to which New Percentil acquired (the “Acquisition”) a production unit of Casi Nuevo with a trade name of Percentil that was judicially awarded to the Company 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. The Company paid a total transaction value of € 610 (approximately $ 679 ), consisting of a € 40 (approximately $ 45 ) cash payment and the assumption of certain customer and labor liabilities and debt and social security payments in the aggregate amount of approximately € 570 (approximately $ 634 ). The Acquisition was financed through existing cash reserves and does not involve the issuance of additional shares or debt. 7 MY SIZE, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Interim Financial Statements (Unaudited) U.S. dollars in thousands (except share data and per share data) b. Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $ 65,386 . The Company has financed its operations mainly through fundraising from various investors. The 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 12 months. As a result, there is substantial doubt about the Company’s ability to continue as a going concern. Management’s 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. Management is actively looking for additional technology and commercial opportunities that will increase the company’s cashflow. The Company has sold additional securities for $ 1,987 see note 9. Additional funds may not be available when the Company needs them, on terms that are acceptable to it, or at all. If the 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. c. In October 2023, Israel was attacked by a terrorist organization and entered a state of war on several fronts. In June 2025, following continued nuclear threats and intelligence assessments indicating imminent attacks, Israel launched a preemptive strike targeting military and nuclear infrastructure inside Iran, aiming to disrupt Iran’s ability to coordinate or escalate hostilities and degrade its nuclear capabilities. Iran responded with multiple waves of drones and ballistic missiles targeting Israeli cities. While most were intercepted, some caused civilian casualties and infrastructure damage. The Israeli military conducted further operations against Iranian assets. After 12 days of hostilities, a ceasefire between Israel and Iran was reached in June 2025. However, the situation remains volatile, and the risk of broader regional escalation involving additional actors persists. The security situation in Israel 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 February 24, 2022, Russia invaded Ukraine. The outbreak of 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. The Company shut down its operation in Russia and is expected to close down its subsidiary, My Size LLC, but due to technical reasons it is expected to occur in the near future. Therefore, the impact from the current situation is very limited. 8 MY SIZE, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Interim Financial Statements (Unaudited) U.S. dollars in thousands (except share data and per share data) Note 2 - Significant Accounting Policies a. Unaudited condensed consolidated financial statements : The accompanying unaudited condensed consolidated interim financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”). The unaudited condensed consolidated financial statements are comprised of the financial statements of the Company. In management’s opinion, the interim financial data presented includes all adjustments necessary for a fair presentation. All intercompany accounts and transactions have been eliminated. Operating results for the six months ended June 30, 2025 not necessarily indicative of the results that may be expected for any future period or for the year ending December 31, 2025. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2024. b. Recently accounting standard that have not yet been adopted. In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) 2025-05 “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”. The ASU introduces a practical expedient for all entities when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. Under the practical expedient, when developing reasonable and supportable forecast as part of estimating expected credit losses, an entity may assume that current conditions as of the balance sheet date do not change for the remining life of the asset. The ASU is effective for annual reporting period beginning after December 15, 2025 and interim reporting within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods. The Company is evaluating the impact of ASU 2025-05 on its consolidated financial statements if it elects to apply the practical expedient. c. Critical accounting estimates: ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, or between annual tests under 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. An impairment charge of $ 144 was recorded as the carrying value of Fashion and equipment e-commerce reporting segment exceeded its expected fair value, as determined using a discounted cash flow model which is primarily based on management’s future revenue and cost estimates. This impairment charge was recorded within Impairment of goodwill, within the Consolidated Statement of Operations, and within the Fashion and equipment e-commerce segment for three months ended June 30, 2025. See note 7- Goodwill. d. Significant Accounting Policies : The significant accounting policies followed in the preparation of these unaudited interim condensed consolidated financial statements are identical to those applied in the preparation of the latest annual financial statements, except the following new policies which was adopted following the business combination (see note 6): Revenue Recognition from resale platform Revenue is recognized in accordance with FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, revenue is recognized upon transfer of control of promised goods and services to customers in an amount that reflects the consideration the Company expects to receive for those goods and services. The Company generates the majority of its revenue from its marketplaces, which allows its buyers to browse and purchase resale items for apparel, shoes and accessories on behalf of sellers. The Company recognizes revenue through the following steps: (1) identification of the contract, or contracts, with the customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, it satisfies a performance obligation. Both buyers and sellers may be customers in the Company’s revenue arrangements. Sellers are the primary customer in a consignment arrangement while the buyer is the primary customer in a sale of Company-owned inventory, referred to as product sales. A contract with a customer exists in both cases when the end-customer purchases the goods obligating the Company to deliver the identified performance obligation(s). The Company requires authorization from a credit card or other payment method,or verification of receipt of payment, before the products are shipped to buyers. 9 MY SIZE, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Interim Financial Statements (Unaudited) U.S. dollars in thousands (except share data and per share data) The Company generally receives payments from buyers before payments to the sellers are due. Consignment Revenue The Company generates consignment revenue primarily from the sale of secondhand apparel on behalf of sellers. The Company retains a percentage of the proceeds received as payment for its consignment service. The Company reports consignment revenue on net. Title to the consigned goods remain with the seller until transferred to the buyer, which occurs 90 days subsequent to purchase of the consigned goods and upon expiration of the allotted return period. The Company does not take title of consigned goods at any time except in certain cases where the consignment window of 90 days expires or returned goods become Company owned inventory and becomes product revenue. Consignment revenue is generally recognized upon purchase of the consigned good by the buyer as its performance obligation of providing consignment services to the consignor is satisfied at that point. Consignment revenue is also recognized upon purchase of the consigned good for which the consignment window has already expired and the Company has taken title to the consigned good. Consignment revenue is recognized gross of seller payouts but net of discounts, incentives and returns. Value added tax assessed by governmental authorities is excluded from revenue. Product Revenue The Company recognizes product revenue on a gross basis as the Company acts as the principal in the transaction. Revenue is recognized at the time control of the asset is transferred to the customer, which is typically upon delivery and acceptance by the customer. The Company is the seller and not an agent due to inventory risk. Shipping Fees The Company charges shipping fees to buyers, which are included in revenue. All outbound shipping costs are accounted for in cost of revenue at the time revenue is recognized. Returns The Company generally has a 14-day return period, and possibly longer accordingly to regulations which may change from time to time, and recognizes a returns reserve based on historical experience, which is recorded in accrued and other current liabilities within the Company’s consolidated balance sheets and reduction of revenue within the Company’s consolidated statements of operations. Inventory of resale platform. Inventories, consisting of merchandise that the Company has purchased and to which the Company holds title, are accounted for using the specific identification method, and are valued at the lower of cost or net realizable value. The cost of inventory is equal to the cost of the merchandise paid to the seller and related inbound shipping costs. Inventory valuation requires the Company to make judgments based on currently available information about the likely method of disposition, such as through sales to individual customers or liquidations, and expected recoverable values of each disposition category. The Company records an inventory write-down based on the age of the inventory and historical experience of expected sell-through. Seller Payable Seller payable includes amounts owed to sellers upon the purchase of sellers’ goods by the Company. Amounts are initially provided as a credit to sellers. These credits may be applied towards purchases from the Company or redeemed for cash. Seller payables show up as seller payables in the consolidated balance sheet. Cost of Revenue Cost of consignment revenue consists of outbound shipping, outbound labor and packaging costs. Cost of product revenue mainly consists of the inventory cost, inbound shipping related to the sold merchandise, outbound shipping, outbound labor, packaging costs and inventory writedowns. Note 3 – Financial Instruments The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, other receivables, trade payables, accounts payable and short and long term loans approximate their fair value due to the short-term maturities of such instruments. The Company holds share certificates in My City Builders, Inc. (“MYCB”), formerly known as Diamante Minerals, Inc., a publicly traded company on the OTCQB. Due to sales restrictions on the sale of the MYCB 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 assets. Schedule of Significant Assets and Liabilities Measured at Fair Value on Recurring Basis June 30, 2025 Fair value hierarchy Level 1 Level 2 Level 3 Financial assets Investment in marketable securities (*) - 14 - 10 MY SIZE, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Interim Financial Statements (Unaudited) U.S. dollars in thousands (except share data and per share data) Note 3 - Financial Instruments (Cont.) December 31, 2024 Fair value hierarchy Level 1 Level 2 Level 3 Financial assets Investment in marketable securities (*) - 7 - (*) For the six-month period and three months ended June 30, 2025 and 2024, the Company recognized gain (based on quoted market prices with a discount due to security restrictions on MYCB shares) of the marketable securities was $ 7 , $ 0 , $ 4 and $( 1 ) respectively. Note 4 - Stock Based Compensation The stock-based expense equity awards recognized in the financial statements for services received is related to Cost of Revenues, Research and Development, Sales and Marketing and General and Administrative expenses as shown in the following table: Schedule of Stock Based Compensation Expenses 2025 2024 Six months ended June 30, 2025 2024 Stock-based compensation expense – Cost of revenues - 1 Stock-based compensation expense - Research and development 14 29 Stock-based compensation expense - Sales and marketing 4 24 Stock-based compensation expense - General and administrative 50 166 Stock-based compensation expense 68 220 2025 2024 Three months ended June 30, 2025 2024 Stock-based compensation expense - Research and development 8 16 Stock-based compensation expense - Sales and marketing - 8 Stock-based compensation expense - General and administrative 34 55 Stock-based compensation expense 46 79 11 MY SIZE, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Interim Financial Statements (Unaudited) U.S. dollars in thousands (except share data and per share data) Note 4 - Stock Based Compensation (Cont.) Stock Option Plan for Employees: The total number of shares of common stock which may be granted to directors, officers and employees under the 2017 Equity Incentive Plan (the “Plan”), is limited to 130,000 shares. On February 14, 2024, the Compensation Committee of the Company granted restricted common stock awards under the Company’s 2017 Equity Incentive Plan to Ronen Luzon, Oren Elmaliah 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 shall vest in three equal installments 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. On the same day, the Company granted a total of 10,000 restricted stock units (“RSUs”) to its directors that will vest on January 1, 2025 and 5 five-years options to purchase up to 6,875 shares of common stock to other employees of the Company at an exercise price of $ 3.832 per share. The option vesting period is over three years in three equal portions from the vesting commencement date. The compensation cost resulting from the grant is approximately $ 314 and is expected to be recognized over a period of 3 years. The 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. Schedule of Fair Value Assumptions of Stock Option 2024 Grants Dividend yield 0 % Expected volatility 86.22 % Risk-free interest 4.3 % Contractual term 2.0 - 2.8 2025 Repricing Dividend yield 0 % Expected volatility 135.6 - 211.3 % Risk-free interest 4.0 - 4.2 % Contractual term 0.18 - 1.70 There were no options, shares of restricted common stock or RSUs granted during the six-month period June 30, 2025, compared to an aggregate of 91,875 options, shares of restricted common stock and RSUs granted during the six-month period ended June 30, 2024, under the Plan. No options were exercised . On June 4, 2025, the compensation committee of the Company board of directors reduced the exercise price of outstanding options granted under the Plan of certain employees, officers and directors of the Company for the purchase of an aggregate of 13,926 shares of common stock (with exercise prices ranging from $ 3.832 to $ 8.72 per share) to $ 1.28 per share, which was the closing price for the Company’s common stock on June 4, 2025 (the “Option Repricing”). No options were exercised. In connectio n with the Option Repricing, the Company accelerated the vesting options held by the Company’s former chief financial officer and the Company recorded one-time expenses of $ 6 and $ 17 . The total stock option compensation expense for employees during the six and three-month period ended June 30, 2025 and 2024 was $ 68 , $ 46 and $ 146 , and $ 79 , respectively. The total stock option compensation expense relating to the Orgad acquisition during the six and three-month period ended June 30, 2025 and 2024 was $ 0 , $ 0 , $ 3 , and $ 0 respectively. Options issued to consultants: In July 2023, the Company entered into a six month agreement (the “Consultant Agreement”) with a consultant (the “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 community. Pursuant to the Consultant 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 . The issuance was approved by the Company’s board of directors in February 2024. During the six and three-month periods ended June 30, 2025 and 2024, the Company recorded $ 0 , $ 0 and $ 71 , and $ 0 respectively, as stock-based equity awards with respect to the Consultant. 12 MY SIZE, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Interim Financial Statements (Unaudited) U.S. dollars in thousands (except share data and per share data) Note 5 - Contingencies and Commitments In July 2024, the Company was served with a legal complaint filed by Shimon Shukron in the Magistrate’s Court in Herzliya (the “Court”) 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. The 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. In June 2025, the Court appointed a third party appraiser to assess the damages. The Company evaluates the claim at a sum of NIS 175,000 (approximately $ 51 ), at this stage. Note 6 – Business Combination Acquisition of Percentil On May 9, 2025, a newly-formed, wholly-owned subsidiary of the Company, New Percentil, entered into a production unit transfer agreement with Casi Nuevo, pursuant to which New Percentil acquired a production unit of Casi Nuevo with a trade name of Percentil that was judicially awarded to the Company 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. The results of operations of New Percentil have been included in the consolidated financial statements since the acquisition date of May 9 2025. New Percentil revenues included in the Company’s consolidated statement of operations from May 9, 2025 through June 30, 2025 were $ 168 . (a) Consideration transferred The Company paid € 40,000 (approximately $ 45 ) and assumed liabilities which the Company had prior to bankruptcy as agreed with the insolvency court. (b) Identifiable assets acquired and liabilities assumed Under the preliminary purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilities assumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement period which is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of New Percentil at the acquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in the period in which the adjustments are determined. 13 MY SIZE, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Interim Financial Statements (Unaudited) U.S. dollars in thousands (except share data and per share data) Note 6 – Business Combination (Cont.) The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date: Schedule of Preliminary Fair Value of Assets Acquired and Liabilities Thousands USD Inventory 96 Fixed assets 14 Technology** 440 Goodwill 134 Other payables ( 50 ) Sellers payables ( 401 ) Long-term payables ( 188 ) Total consideration paid 45 * The estimated useful life of the technology is 2 years. ** The technology was calculated using MEEM replacement cost and is ranked as Level 3 assets as there is no active market. (c) Acquisition-related costs The Company did not incur any direct transaction costs during the six month period ended June 30, 2025 which were included in general and administrative expenses in the consolidated statements of income (loss). Note 7 – Goodwill As of June 30, 2025 the Company has experienced a triggering event in the reporting period due to 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. The table below indicates changes in the most significant inputs to the Company’s impairment analysis on each testing date since its last annual test for the Fashion and equipment e-commerce platform segment. Schedule of Impairment Analysis Discount rate Terminal growth rate Revenue growth rate Testing dates December 31, 2024 22.5 % 3 % 7.5 %- 65.6 % June 30, 2025 22.5 % 3 % 7.5 %- 31.6 % In June 2025, the Company updated the forecasted future cash flows used in the impairment assessment, including revenues and margin 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, but the Company recorded a $ 144 non-deductible goodwill impairment charge for the quarter ended June 30, 2025 (level 3 fair value measurement). This impairment charge was recorded within Impairment of goodwill, within the Consolidated Statement of Operations, and within the Fashion and equipment e-commerce platform segment for the six months ended June 30, 2025. The aggregate carrying amounts of goodwill allocated to each reporting unit are as follows: Schedule of Aggregate Carrying Amount Of Goodwill 2025 2024 June 30 December 31 2025 2024 Resale platform 142 - Fashion and equipment e-commerce platform - 133 Total 142 133 14 MY SIZE, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Interim Financial Statements (Unaudited) U.S. dollars in thousands (except share data and per share data) Note 8 – Operating Segments The Company has the following three segments: (i) fashion and equipment e-commerce platform, (ii) SaaS based innovative artificial intelligence driven measurement solutions and (iii) resale platform for apparel. This realignment reflects the way resources are allocated, and performance is assessed by the Chief Operating Decision Maker. The fashion and equipment e-commerce platform which represents Orgad’s activity that was acquired by the Company in 2022, mainly operates on Amazon. The SaaS based innovative artificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of the Company and certain of its subsidiaries, My Size Israel, My Size LLC and Naiz. The resale platform currently operates as a sperate segment under New Percentil following the closing of the Acquisition in May 2025. The Company is evaluating and integrating into this segment and may consolidate it in the future. The Company operating segments are the same as its reportable segments. The CODM 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 CODM regularly reviews segment operational 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 expenses. Revenue, 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, are mostly allocated based on revenues, most of which is allocated to the fashion and equipment e-commerce platform segment. Information related to the operations of the Company’s reportable operating segments is set forth below: Schedule of Reportable Operating Segments Fashion and equipment e-commerce platform SaaS Solutions Resale Platform Total As of the six months ended June 30, 2025 Revenues from external customers 2,968 349 168 3,485 Cost of revenues ( 1,816 ) ( 15 ) ( 110 ) ( 1,941 ) Research and development expenses - ( 205 ) ( 19 ) ( 224 ) Amazon fees ( 721 ) - - ( 721 ) Sales and marketing Salaries ( 68 ) ( 127 ) - ( 195 ) Other Segment Items (*) ( 1,405 ) ( 494 ) ( 151 ) ( 2,050 ) Segment loss ( 1,042 ) ( 492 ) ( 112 ) ( 1,646 ) Reconciliation of Profit or Loss Financial income, (expense) net 136 Loss before income taxes ( 1,510 ) Significant non-cash items: Amortization ( 9 ) ( 80 ) ( 32 ) ( 121 ) Share based payments ( 45 ) ( 23 ) - ( 68 ) (*) Other segments include shared based payments, rent and related expenses, professional services, insurance and other expenses. Fashion and equipment e-commerce platform SaaS Solutions Resale Platform Total As of the six months ended June 30, 2025 Assets 7,275 1,774 813 9,862 15 MY SIZE, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Interim Financial Statements (Unaudited) U.S. dollars in thousands (except share data and per share data) Fashion and Equipment e-commerce platform SaaS Solutions Total As of the six months ended June 30, 2024 Revenues from external customers 4,623 340 4,963 Cost of revenues ( 2,746 ) ( 37 ) ( 2,783 ) Research and development expenses - ( 263 ) ( 263 ) Amazon fees ( 1,297 ) - ( 1,297 ) Sales and marketing Salaries ( 64 ) ( 250 ) ( 314 ) Other Segment Items (*) ( 1,558 ) ( 696 ) ( 2,254 ) Segment loss ( 1,042 ) ( 906 ) ( 1,948 ) Reconciliation of Profit or Loss Financial income, (expense) net ( 32 ) Loss before income taxes ( 1,980 ) Significant non-cash items: Amortization ( 54 ) ( 97 ) ( 151 ) Share based payments ( 151 ) ( 69 ) ( 220 ) (*) Other segments include shared based payments, rent and related expenses, professional services, insurance and other expenses. Fashion and equipment e-commerce platform SaaS Solutions Resale Platform Total As of the three months ended June 30, 2025 Revenues from external customers 1,661 177 168 2,006 Cost of revenues ( 764 ) ( 8 ) ( 110 ) ( 882 ) Research and development expenses - ( 123 ) ( 19 ) ( 142 ) Amazon fees ( 336 ) - - ( 336 ) Sales and marketing Salaries ( 37 ) ( 37 ) - ( 74 ) Other Segment Items (*) ( 742 ) ( 266 ) ( 151 ) ( 1,015 ) Segment loss ( 218 ) ( 257 ) ( 112 ) ( 587 ) Reconciliation of Profit or Loss Financial income, (expense) net 136 Loss before income taxes ( 451 ) Significant non-cash items: Amortization - ( 51 ) ( 32 ) ( 83 ) Share based payments ( 10 ) ( 37 ) - ( 47 ) (*) Other segments items include shared based payments, rent and related expenses, professional services, insurance and other expenses. 16 MY SIZE, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Interim Financial Statements (Unaudited) U.S. dollars in thousands (except share data and per share data) Fashion and Equipment e-commerce platform SaaS Solutions Total As of the three months ended June 30, 2024 Revenues from external customers 1,816 163 1,979 Cost of revenues ( 979 ) ( 16 ) ( 995 ) Research and development expenses - ( 131 ) ( 131 ) Amazon fees ( 565 ) - ( 565 ) Sales and marketing Salaries ( 33 ) ( 121 ) ( 154 ) Other Segment Items (*) ( 700 ) ( 311 ) ( 1,011 ) Segment loss ( 461 ) ( 416 ) ( 877 ) Reconciliation of Profit or Loss Financial income, (expense) net ( 87 ) Loss before income taxes ( 964 ) Significant non-cash items: Amortization ( 27 ) ( 48 ) ( 75 ) Share based payments ( 50 ) ( 29 ) ( 79 ) Fashion and equipment e-commerce platform Saas Solution As of December 31, 2024 Assets 8,066 1,993 Note 9 – Significant events during the reporting period. On January 21, 2025, the Company entered into an At The Market Offering Agreement (the “Offering Agreement”), with H.C. Wainwright & Co., LLC (“Wainwright”), 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 million. 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. As of June 30, 2025, the Company sold 1,052,917 shares pursuant to the Offering Agreement for aggregate gross proceeds of approximately $ 2,201 ($ 1,987 net). Prepaid legal and auditing costs are classified as other receivables in the balance sheet. Note 10 – Events subsequent to the balance sheet date a. On July 21, 2025, the Company established Ten Peacks Ltd., which is incorporated in Israel and is a wholly-owned subsidiary of My Size Israel, that focuses on marketing and distribution of global apparel and shoes brands in Israel. b. Subsequent to the balance sheet date and prior to the issuance of these financial statements, in connection with the Offering Agreement described in note 9 above, the Company sold additional 153,783 shares of common pursuant to the Offering Agreement for aggregate gross proceeds of approximately $ 2 18 . 17